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Five Things to do Right After Closing

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If you just bought your first home, you’re probably still celebrating and feeling the sense of pride and accomplishment that comes with home ownership. You’re shopping for furniture, drawing up plans for renovations … but wait! There are some important tasks to cross off your list before you get to the fun stuff.

1. Change the locks: A lot of people came in possession of your keys during the home sale process, whether it was on the market for a year or a day. Protect yourself by changing all the locks, just in case a set of keys fell into the wrong hands.

2. Make copies: It’s good to have copies of all your closing documents, if only for reference. But in the worst case, you’ll be thankful you have your own copies if something goes wrong.

3. Make sure you get your mail: The post office won’t deliver your mail if the mailbox doesn’t have a name, and it’ll be difficult to sign for packages if UPS can’t get to your front door. If you’re in a multi-unit building, make sure to put your name on your mailbox and verify that the buzzer or call box is working.

4. Meet your neighbors: It’s not just about being cordial. It’s good to exchange contact info with your neighbors in case there’s a problem in the building or someone is being noisy.

5. Prepare for emergencies: Store the contact info for insurance agents and services like plumbers and locksmiths in your phone. You don’t want to waste time searching the internet when you’re locked out on a winter night or your home suffers fire damage.

Just Moved In? Here Are Some Must-Haves for Your New Home

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Moving into a new home is an exciting time in your life. You’re making plans for renovations and choosing furniture, but before you get too far ahead of yourself, there are some more important matters to attend to.

Staying safe: Make plans for home security and emergencies. What’s your escape route in case of a fire, or shelter in case of a severe storm? Do you have a home security system, a protective dog, or weapon available in your bedroom? Choose your “Stay Safe” tactics and make a plan for the worst-case scenarios that put your safety at risk.

A disaster kit: Even if it’s as simple an inconvenience as a power outage, you want to be ready. Stock a flashlight, non-perishable food, water, a first-aid kit, and warm clothes/blankets that you can access in case of an emergency.

A spare (secret) key: It’s no fun getting locked out of your house—especially in cold or wet weather—and no one wants to pay a locksmith to access their own home. Hide a key somewhere outside (just be more creative than hiding it under the welcome mat). There are plenty of devices you can purchase, such as magnetic key hiders, that can help you hide your key in places that a trespasser wouldn’t consider

The Best Things About Home Ownership

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If you own a home, there was certainly a lot that went into your decision to buy rather than continue to rent. Now you’re enjoying all the advantages of homeownership—here are the top five.

1. Building wealth: When you own a home, you have an asset that will likely increase in value over time. It provides great security, and the opportunity to essentially live “rent-free” in your retirement years when the home is paid off.

2. Freedom to make it your own: Landlords can be strict about customizing rental properties. Most don’t even allow their tenants to paint. But when you own a home, the possibilities are endless. Get rid of a wall, or paint it any color you like. It’s your property.

3. Building equity: Every mortgage payment your make, and every improvement you make on the home, is putting money back into your pocket. Unlike with renting, owning a home gives you more than just a place to live. You can use your home equity to get loans and even cash for emergencies.

4. More freedom and stability: Studies show that homeowners have a better sense of pride and security than renters. When you relax in your own home, you know it’s the result of hard work and planning, and that you have the freedom to change it as you wish.

5. Tax advantages: Homeowners can deduct the interest paid on home loans and property taxes—that’s a big break that comes up every April 15.

New Home? Here’s How to Save

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When you’ve just purchased a new home, there’s a ton on your mind. There’s moving, decorating, getting to know your new neighborhood, and more. Here are a few things that should be at the top of your to-do list, because they’ll save you a lot of money.

Check on your water heater
Set your water heater for 120 degrees Fahrenheit. This is plenty hot enough for bathing, washing dishes, and any other household use of hot water, so heating water above 120 degrees is a waste of energy and money. And if your water heater is an older model, it’s worthwhile to invest in a water heater blanket to keep it insulated.

Replace air filters
Sellers often put in a lot of cosmetic work to get the home move-in ready, but they often skip or forget about air filters in the HVAC system. Filters can be found at your local hardware store (just make sure to get the right size) and are easy to replace. Doing so will improve air flow and quality, and save on energy costs.

Get a smart thermostat
A smart thermostat, such as Nest, will cost you some money up front but is well worth the long-term savings. It’s programmable so that your AC and furnace run at lower levels when you’re not home, so you’re not wasting money to cool or heat an empty house.

Set up a space to air-dry clothes
Whether it’s a rack in your laundry room or a clothesline in the back yard, air-drying clothes is a big money saver over even the most energy-efficient dryers. Air-drying your garments will also help them last much longer.

Check for leaks and running toilets
A leaky faucet or a constantly-running toilet will use up water unnecessarily, and that’ll show up on your utility bill. And in the worst case, they’ll cause expensive water damage and mold.

Five Ways You Can Get Earnest Money Back!

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No matter how much time you spend on researching and educating yourself about your home purchase, it’s hard to cover every detail. Here are a few tips for avoiding rookie mistakes with your first home purchase.

Earnest money is a deposit you pay when you make an offer on a home—it’s a way to show the seller that you mean business. Usually you can’t get it back, but there are several circumstances that allow you to recover your earnest money.

  1. Appraisal contingency: With an appraisal contingency, you can recover your earnest money if the home is appraised for less than your offer. This gives you a better negotiating position—if the seller doesn’t agree to a lower price, you can get your earnest money back and walk away from the deal.
  2. Major problems with the home: It may be your dream home at the surface level, but an inspection could reveal major, major problems—such as issues with the foundation, or flood damage. In that case, you can get your money back if the seller doesn’t agree to a lower price.
  3. The seller backs out: Obviously, if the seller changes their mind about the transaction—maybe they decide not to sell, or accept a higher offer—you get your earnest money back.
  4. Your house hasn’t sold: Many buyers can’t afford a new home if they’re still financially responsible for their old one. In this case, you can work a sale contingency into the contract, and get your earnest money back if the home doesn’t sell soon enough.
  5. Financing issues: Though there are some limits on financing contingencies, you can get your money back if you’re unable to get a loan.

 

Hidden Homeowner Costs

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Budgeting for buying a home can be difficult enough when you’re just weighing mortgage options and a purchase price. But there are many other factors that go into the cost of home ownership. Some of them are one-time expenses that you’ll pay during the home buying process, while others will be recurring costs for as long as you own the home.

Closing costs
There are several smaller fees that add up to a rather large sum when you’re going through the closing process—loan fees, attorney fees, underwriting fees, and more. They typically add up to 2–5% of the purchase price. For a $300,000 home—roughly the national median—that’s in the neighborhood of $10,000, so be sure to budget for it.

Appraisal
Your lender will require an appraisal, and the appraisal fee (a few hundred dollars) comes out of your pocket.

Inspection
The few hundred dollars you’ll pay for a home inspection is money well spent, but it’s something you have to keep in mind during the purchase process. You’ll have the peace of mind of knowing the house is free from any major issues, and you’re making a smart, solid investment.

Insurance
Although homeowners insurance isn’t legally required, it’ll almost certainly be required by your lender. Further insurance, such as flood insurance, may also be required (depending on your location).

Home Owners Association
If you’re living in a property or community with shared spaces, you’ll almost certainly have an HOA fee. This pays for things like trash removal, maintenance of common areas, and for recreational facilities like gyms and swimming pools.

 

Avoid These Comments When You’re Buying a Home

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Sometimes you need to keep a poker face when you’re buying a home. It’s not in your best interest to be totally candid with the seller and listing agent when you’re considering a home. Here a few things that are better left unsaid.

“This is at the top end of our budget”: Don’t let the listing agent know that a home is at the top of your budget. You want to keep all the bargaining chips you can, and letting the seller know your budget can hurt you when it comes time to negotiate.

“I hate the paint”: Or furniture. Or cabinets. Or any of the decor. No matter how hideous the wallpaper in the kitchen is, take care not to insult the seller’s taste. If they’re considering multiple offers, you don’t want to be the buyer that offended the seller!

“We can’t wait to renovate”: Customization is one of the big perks of homeownership, but it’s best to keep your renovation plans quiet for the moment. The seller may have a lot of memories in the home, and may not appreciate your plans to immediately tear down some walls.

 

Refinancing, the Right Move?

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The federal reserve recently raised interest rates, and if you have an Adjustable Rate Mortgage (ARM), it may be a good time to consider refinancing your home. There’s no one-size-fits-all answer to whether your should refinance, so here are a few of the main considerations.

How long does your introductory rate last?
Most ARMs have a fixed rate for the beginning of the mortgage. This is an introductory period (usually 3-10 years) when your rate will remain constant before it can be adjusted. If you have several years left in your introductory period, you can monitor interest rates for a while before making a decision. But if the intro rate is ending soon, it’s a great time to explore refinancing at a fixed rate.

How long are you staying?
If you plan to sell your home soon—especially if you’re still on a fixed introductory rate—there’s not much motivation to refinance. But if you’ll be at your home indefinitely, you should consider your refinancing options. You could eliminate the stress of not knowing what your future mortgage rate and payments will be.

What’s your loan balance?
The change in your mortgage payment will of course be determined in part by your remaining balance. If you owe $100,000-$200,000, a new interest rate may not greatly affect your monthly payment. On the other hand, if you owe $500,000, a change in interest rate could lead to a much higher payment.

Other factors
The previous items are just a few of the factors that should go into a decision about refinancing. Changes in income and your current credit score should also be considered, so be sure to weigh your options and make an educated decision.

 

Five Tips for First-Time Buyers

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No matter how much time you spend on researching and educating yourself about your home purchase, it’s hard to cover every detail. Here are a few tips for avoiding rookie mistakes with your first home purchase.

  1. Save as early as you can: Even if you think you’re years away from buying your first home, try to start saving for your down payment. It makes a huge difference in your monthly payments, and helps avoid paying Private Mortgage Insurance.
  2. Be thorough with mortgage shopping: There are countless resources out there that can help you get the best terms for your mortgage. It may seem like a lot of work to shave less than a point off your mortgage rate, but it’ll save you thousands in the long run.
  3. Consult a skeptic: You’re likely to fall in love with a home, and that can make it difficult to take problems seriously. Bring along a skeptical friend or family member who can give you an honest opinion.
  4. Be patient with getting settled: You’ll be anxious to make your new home your own, but take some time to see how your budget truly shakes out. In other words, hold off on big furniture purchases and remodeling projects.
  5. Make sure you’re happy with the neighborhood: The house may be perfect, but don’t discount the surroundings. You don’t want to end up in the suburbs if you’re going to miss walking to your favorite coffee shop, and you don’t want to settle for the city if you’re looking forward to some peace and quiet.

 

No Time Like the Present!

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Thinking about buying your first home, or perhaps upgrading from your current place? Thanks to the current economic climate and game-changing technology in the housing market, now is the perfect time to take the plunge.

Low interest rates
Lenders are giving buyers mortgage rates that are extremely enticing—you can get a mortgage below 4.0%. There’s a good chance these are the lowest mortgage rates we’ll see in a long time, which means affordability is at a high.

Prices are on their way up
Mortgage rates may be low, but housing prices are getting higher and higher because of demand—prices increased 5.1% year-over-year in November 2015. If you’re thinking about buying, delaying a few years could lead to a higher purchase price, or getting less home for your money.

A great job market
The United States added 2.65 million jobs in the last year. There’s increasing job security and available work, leading to high consumer confidence.

Technology makes buying simpler and less expensive
Along with listing websites like Zillow and Trulia, there are an increasing number of websites and apps that simplify the process, make it easier to shop around for homes and mortgages, and save you money.

Cheap fuel
Lower gas and energy prices mean more money in your pocket and more purchasing power. The money you’re not putting into your gas tank or toward your utilities can instead go toward saving for a down payment or affording a bigger monthly mortgage payment.