Blog :: 02-2017

Tips for Preparing Your House For Sale

Highlights:

  • When listing your house for sale your top goal will be to get the home sold for the best price possible!
  • There are many small projects that you can do to ensure this happens!
  • Your real estate agent will have a list of specific suggestions for getting your house ready for market and is a great resource for finding local contractors who can help.

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How to Refinance a Mortgage?and Why a Refi Might Be Right for You

 

Even after you’ve landed a loan and bought your dream home, that’s not where your knowledge of mortgages should end. For one, you’ll want to know the ins and outs of how to refinance a mortgage—info which can come in handy for a variety of reasons.

Yet beware—make a wrong move when you refinance, and you could easily get in over your head. That’s why in this final installment of our Stress-Free Guide to Getting a Mortgage, we highlight the right (and wrong) ways to tap into your home equity.

What is home equity?

Your home equity is the current market value of your home, minus the amount you owe on your mortgage. While paying down your mortgage will increase your home equity, the value of your home can rise (or fall) and increase (or decrease) your home equity, too. (Here’s how you can can get an estimate of how much your home is worth.)

What is a refi?

When you refinance your mortgage, you’re essentially applying for a new loan. Once again, you’ll be subject to complete documentation and verification of your income, assets, debt-to-income ratio, credit score, and job history. Your house will need to appraise for enough value to support the new loan. You will also need to either pay closing costs, which run anywhere from 2% to 7% of the home’s sales price, or opt for a no-cost refinance, where your lender covers the closing costs but you get a slightly higher interest rate on your new loan.

Whether you use the same lender is entirely up to you, says Jordan Dobbs, a loan officer at Washington First Mortgage in Rockville, MD. Even if you were happy with your original lender, it could be beneficial to shop around and compare your loan options.

4 reasons to refinance

There are several things that could prompt you to refinance:

  1. To get a lower interest rate. Many people want to refinance when interest rates are lower so that they can lower their monthly mortgage payments and, consequently, pay less in interest over the life of the loan. If that’s the case, you’d want to look at your potential closing costs and calculate your break-even point to determine whether it makes sense to refinance, since you’re also resetting the clock in terms of the life of your mortgage. You can use realtor.com®’s refinance calculator to crunch the numbers of your own mortgage and see how much you’d save. (One rule of thumb says that if your interest rate is more than 1% above current rates, refinancing is a smart move.)
  2. To get a different type of mortgage. Some borrowers want to refinance an adjustable-rate mortgage into a fixed-rate loan, while others want to reduce their loan term from a 30-year loan to a 10-, 15-, or 20-year loan in order to pay it off faster and save money over the long haul.
  3. To stop paying mortgage insurance. If you didn’t have enough cash to make a 20% down payment when you purchased your home, you were likely forced to get mortgage insurance—a monthly premium that typically costs between 0.3% and 1.15% of your home loan. Refinancing to a loan without mortgage insurance can save you hundreds of dollars each month, but you’ll need to have at least 20% equity in your home to qualify, says Dobbs.
  4. To tap into the home’s equity. People also refinance because they want to take cash out of their property, which is often done to make home improvements, pay for college, consolidate debt, or make a down payment on a second home. If you decide to go that route, you can choose between a home equity loan and a home equity line of credit (or HELOC).

What’s the difference between a home equity loan and a HELOC?

Although these two loan products sound similar, they’re significantly different. With a home equity loan, you decide how much you want to borrow and then make monthly payments, similar to a regular mortgage. Thus, with a home equity loan you avoid the temptation to overspend, because you’ll be borrowing a set amount. Also, because the interest rate is usually fixed, you have peace of mind knowing that the payments will remain the same.

A home equity line of credit, or HELOC, meanwhile, functions more like a credit card, because it allows you to borrow up to a certain amount (typically 75% to 85% of the home’s appraised value, minus what you still owe on your home) on an as-needed basis over the term of the loan (usually 5 to 20 years). In fact, your lender will actually issue you a plastic card that you can use to access the money easily. A HELOC works well if you want to borrow money but don’t know exactly how much you’ll need (a common conundrum when making home improvements).

The main drawback to HELOCs? Unlike with home equity loans, interest rates on HELOCs are variable, which means they fluctuate depending on market conditions. And while many lenders offer a low “introduction” rate, it lasts only for a matter of months; after that, the interest rates will adjust—and continue to readjust—which could create problems if you don’t prepare for the potentially higher payments. So be sure to weigh these pros and cons before you start chipping away at the equity you’ve gained.

 

 

7 Cute Yet Cringeworthy Ways Your Pets Can Wreck a Home Sale

7 Cute Yet Cringeworthy Ways Your Pets Can Wreck a Home Sale

You love your pets, but the people checking out your house in the hope of buying it may not share your ardor. The mere sight of these furry creatures can tip the scales, for some buyers, against making an offer on your property at all. Perhaps you only want animal lovers to inherit your home—but if you’re a come-one-come-all kind of home seller, you may want to try to avoid the seven deadly home-sale saboteurs that are listed below. We’ll show you how.

Tufts of fur

Just when you think you’ve got it all vacuumed up, you spot drifts of fur under tables and stuck to upholstery.

“A lightly dampened sponge is perfect for removing pet hair on furniture and fabric,” says Danessa Itaya, vice president of Maid Right, a home-cleaning service. Alternatively, you can try lint rollers and squeegees, adds Nancy Jones, an interior decorator with Showhomes, a home-staging company.

Floor stains

If your feline likes to cough up grass clippings in the hall or pee under the basement workbench, a potential buyer will likely note the discoloration and either wince or run (or perhaps wince, then run). Carpet and floor stains need to be fixed before any showings. If you can swing it, replace the rug, or at least roll it up and stash it in the garage. Hire a flooring professional to remove tougher stains, either by sanding and re-staining a wood floor or dealing them with a commercial-grade cleanser.

That aroma

You’re so accustomed to—and in love with—your pet that you no longer realize she’s given your home a certain scent … but rest assured, visitors will pick up on it as soon as they set foot through your front door. In some cases, before they set foot through the door. The remedy? Good ol’ baking soda, which is safe and effective, says Itaya.

“You can sprinkle it in your cat’s litter box as a deodorizer or put a small amount in a spray bottle with water to apply to your pet’s favorite hiding spots,” she says. And if the smells haven’t been absorbed by the carpet padding, they can generally be lifted out with a pet enzyme removal product or Resolve, notes Jones. “There are also many candles and air fresheners that can eliminate odors without overpowering,” she says.

 

Pets on beds

Cats may have some leeway to nap on the bed, but the very presence of a dog on the couch or bed may scare some people off, often for good reason. When you’re getting ready for a showing, be sure your pooch is out of the bedrooms and either housed in his crate or shipped off to a friend or doggy day care for the afternoon. Then make sure there’s no telltale pet hair left behind.

Scratches and dings

Puppies will chew on just about anything, including chair legs, baseboards, and other wooden features in your home. If you see significant furniture damage, remove the pieces and store them during your next open house. But smaller marks can be hidden with a couple of DIY solutions.

“Felt-tip markers can make a world of difference on scratched-up furniture—find one that matches the color of the wood, and you’ll quickly transform dings so they’re less noticeable,” says Itaya. Jones likes Old English furniture polish to clean up pet scratches.

“It now comes in both light and dark versions and covers most surface marks,” she reports. To remove a deep scratch, use wood putty to fill in the grooves and follow up with a stain to match.

Pet accessories

You won’t impress a potential buyer if he or she has to dodge your pet’s toys in order to get inside the door. Remove these hazards by gathering up her chew things and placing them in a nice-looking basket or bin. You should also hang up your pup’s tangled pile of leashes, fold and straighten her outfits and jackets if she has any, and stash pet beds until the showing is over.

Bowls and litter box

Water dishes and pet food bowls are easily knocked over, so be sure to dump them out and load them in the dishwasher before an open house begins. Of course, you’ll scoop out the cat box so that it’s as clean as possible, but it’s better to get rid of it entirely. Not only does it smell, but it’s just plain gross to catch sight of that gravelly stuff.

“If you must have a litter box around, I usually suggest the clumping kind [of litter] because it’s easier to clean,” Jones recommends. And if your visitors are coming with pets, be sure to spray neutralizers on the areas where they migrate, to prevent dogs or cats from marking their territory.