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A Guide To Mortgages, HELOCs, and More


Whether you’re looking to make a first-time purchase, refresh an existing home or simply leverage built-up equity for other reasons, it’s important to figure out which path is right for you and understand the lending options available.

First-time buyers must start with determining what is affordable. In addition to the mortgage payment, housing costs will include property taxes, homeowners insurance and fees, such as homeowner association dues. Altogether, costs should be no more than 28 percent of monthly gross income and should leave room to continue servicing other debt, such as student loans, credit cards or auto loans.

When preparing to buy a home, work through credit pre-approval to be ready with a strong offer when the opportunity arises. In addition to reviewing credit history, a loan originator will consider the amount of the down payment. A down payment typically ranges from 3-20 percent, and one that is less than 20 percent may require you to purchase mortgage insurance.

A mortgage originator, however, can provide a variety of lending options to optimize your investment, from 15- and 30-year mortgages to fixed and variable terms. If planning to make some improvements to a much-loved residence, consider financing the updates through a home equity line of credit (HELOC). Eligibility depends on how much equity has been built up in the home and the lender’s loan-to-value ratio. A HELOC works much like a credit card and offers flexibility. A minimum amount is paid monthly, and interest applies to the amount borrowed. Before embarking on a remodeling project, do some homework.

Start with the lender to determine the value of the home and the loan amount available. Then, establish a budget, leaving room for unexpected expenses. Work with a reputable professional to define the project and its requirements, and shop around for bids and recommendations to confidently select a contractor. Some lenders offer checklists to help get the most from the investment.

Another option for financing a project through a home’s equity is a home equity loan (HELOAN). As with a mortgage, the loan is granted as a lump sum and is paid back in installments over time, typically 10-15 years and at a fixed rate locked in at the time of securing the loan. A HELOAN works well for a one-time goal to improve the value of a home. Be mindful that either a HELOAN or a HELOC introduce some uncertainty, as monthly expenses will increase and must be maintained to avoid foreclosure risk. Remember to consult a professional for advice applicable to your specific situation. Start with a lender who can help you identify financial options available to home buyers and owners today.

With careful planning and budgeting, the financing you need may be well within reach.

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Home Warranties: What You Should Know Before Buying

home warranties

By Megan Wild, author of Your Wild Home blog 

Should you buy a home warranty when buying a home? There are several considerations to think about when making the decision.

What a Home Warranty Is and What It Covers

Home warranties are essentially service contracts that cover your home. They cover repair on large systems and appliances within a home. For example, warranties commonly cover heating, ventilation and air conditioning (HVAC) systems, hot water heaters, plumbing and electrical systems and major appliances.

home warrantiesDo not confuse home warranties with insurance on systems and appliances. Insurance on a system or appliance will pay the insured party if there is a malfunction or if the item doesn’t perform as advertised. As a homeowner, you’d receive an insurance payout that would enable you to purchase a replacement item.

Under a home warranty, if a covered system or appliance does not work properly or breaks, the homeowner gets in touch with the warranty company. That company, in turn, gets in touch with the contractors they employ to make the repair. Those contractors are the ones who will come to your house to look at the system or appliance.

If the contractors cannot make a repair, but the system or appliance needs to be replaced to work properly, the contractor will also replace it under the terms of the home warranty. They will replace an item if the malfunction is due to normal wear and tear.

home warrantiesBut the home warranty will not cover a repair or replacement that the contractors deem due to actions of the homeowner, pre-existing conditions or misuse. If the HVAC stops working because children have stuffed toys in the vents, for example, the damage will not be covered by the warranty. If the boiler’s damage occurred before a homeowner bought the home, the warranty may not cover it, because it is pre-existing damage.

The homeowner pays for the cost of the warranty per year. Home warranties cost from $350 to $500 per year. In addition, the contractor charges a service fee, usually approximately $100.

Sometimes, real estate agents or sellers add a home warranty to a home being purchased, because malfunctioning or breakage of major systems shortly after a sale is often the seller’s responsibility.

Several companies offer home warranties. Sears, for example, offers them, as does American Home Shield® and Total Protect.

Are They a Good Idea?

Now that we’ve explained what a home warranty is and what they cover, it’s time to consider whether they are a good idea.

From a consumer standpoint, a home warranty may not be necessary if the home you’re buying is new construction or the home is relatively new. Many states require the structure of a home be guaranteed for 10 years. Modular homes often come with a 10-year warranty as well. So, if your roof on a new home suddenly develops leaks, for example, the builder is likely required to repair or replace it.

Major systems like HVAC and major appliances are all likely under warranty in new home construction. It’s a good idea to check into the warranties for individual systems and appliances. Some may last a year, and others may last more. If all the individual appliances and major systems are already under warranty, purchasing another one would be a waste of money.

If you are buying an older home, however, a home warranty might make sense. Most systems and major appliances in a home need to be replaced when they reach a certain age, ranging from 15 to 30 years. The roof and siding need to be replaced every 15 to 20 years. If you believe a warranty would help cover the cost of replacement, it may be a good idea.

Warranties may also provide peace of mind to first-time homebuyers who are worried about the cost of maintenance and repair on a home.

Just be aware of what they do not cover. Leaky faucets, for example, are almost never covered by a warranty.

There might also be difficulties with the quality of the contractors. Some consumers complain the contractors home warranty companies send perform less-than-ideal repair and maintenance work.

Poor workmanship can be frustrating. It may result in either the system or appliance not working properly, or in the homeowner having to replace it or hire another contractor to fix it despite the warranty.

It’s a good idea to read reviews of warranty companies and their contractors before purchasing a home warranty.

While home warranties may be a good idea for buyers of older homes, especially for first-time home buyers, they may be redundant for purchasers of new homes. Many states require builders to guarantee the structure of new homes for a decade, and new appliances may already have individual warranties. Homebuyers should consider the pros and cons of purchasing home warranties.

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3 Things Bathroom Designers Want You to Know

bathroom designers

By Lisa Batson Goldberg, Houzz

Design professionals, who field the same questions from clients day after day, know that a little upfront knowledge on the part of homeowners goes a long way in smoothing the construction process. Here, designer Stephanie O’Donohue of smarterBathrooms+ in Port Melbourne, Australia, reveals the three things she wishes every client knew before starting a bathroom project, along with the answer to her most-asked question and a golden nugget of wisdom for the memory bank.

bathroom designer

smarterBATHROOMS+, original photo on Houzz


1. Minimalism (almost) never comes cheap.

“Clean, sleek lines” is what my clients ask for — think single sheets of material, no [seams], no handles and no grout lines. The most common misconception I come across is that this is a cheap look to achieve. People are fooled by the apparent simplicity of the aesthetic. But to achieve a truly beautiful minimalist look, the detail in the build needs to be precise.

Some of the simplest-looking spaces I have worked on have been the most expensive, due to the immense detail and meticulous planning required.

Specifying no cabinetry handles often means expensive opening mechanisms or hand-cut joinery. No [seams] in stone means buying oversized slabs and having an expert stonemason on hand to book-match the ends perfectly. And no grout lines means either huge, expensive tiles that take two tilers to lay (which doubles the labor cost) or porcelain sheets that can be cut and installed only by a stonemason — onto a wall that most likely has to be straightened instead of just packed.

bathroom designer

smarterBATHROOMS+, original photo on Houzz


2. Unless you’ve done it before, and done it well, don’t DIY the tile.

It’s just not worth it. Planning the tiling and tiling itself are both art forms. I have seen far too many new bathrooms that only look good when you’re not wearing your glasses. Once you see a crooked tile or uneven grouting, it cannot be unseen.

A tiler who plans the space, tile by tile, to ensure the placement of cuts and grout lines will be perfect is worth their weight in gold. You may be tempted to tackle a job that seems straightforward, but don’t do it. Especially if you have contrasting grout.

A good tiler will work more quickly than you could ever hope to, and they will be able to correctly use epoxy grout, giving you a superior and longer-lasting finish than you’d achieve yourself with a regular cement-based grout. They will also be able to disguise an uneven wall or an unsightly edge to a degree.

The tiles and grout are your first defense against water damage. Inferior tiling puts your whole room and subfloor at risk. Step away from the tiles and call an expert.


bathroom designer

smarterBATHROOMS+, original photo on Houzz

3. Tight budget or short on ideas? Go big!

This is one of my favorite tricks. Sometimes you can’t afford the Rolls-Royce of every element in your space. But if you can distract from your more economical, practical design decisions with a wow feature, you can save yourself thousands in upgrading everything unnecessarily.

Oversized handles, for example, can add a touch of drama and interest to an otherwise plain bathroom. Have you got a high bathroom ceiling? Find the biggest pendant light your electrician can lift, and fill the bathroom with an object so demanding of attention that it develops a personality of its own. You’ll find it gives your bathroom a real designer edge and detracts from the cheaper elements in the space.

You could also distract the eye with repetition, where you take one design idea and use it several times over in a space. Do you love penny round tiles? Pick a round basin, rounded [faucets], a round mirror and towels with a circular pattern. Repetition of a theme will give the space a cohesive, thought-out feel where every design decision is deliberate.

It will also help you shop better as you won’t fall into the trap of picking 10 things you love and finding none of them work together.

bathroom designer

smarterBATHROOMS+, original photo on Houzz

Most-asked question.

“How long does a bathroom renovation take?” Many people are surprised when they hear that a quality bathroom renovation takes about four weeks. Renovation shows are not reality!

Many people don’t have a spare bathroom they can use while the renovation takes place. If that’s the case for you, plan ahead. Hire a portable toilet or shower from a reputable builder, join a nearby gym (there are often free trials you can take advantage of) or consider renting elsewhere for a month while the job is done. None of these are ideal, but if you’re going to build a bathroom to last 20 to 30 years, that month of inconvenience will quickly be forgotten when you step inside your gorgeous new space.

bathroom designer

smarterBATHROOMS+, original photo on Houzz

Golden nugget of advice. Unless it’s a color other than chrome, a [faucet is a faucet]. Something basic will be fine, so don’t spend your hard-earned cash there. Funnel your money into custom cabinetry instead. Having a smart drawer that fits your lipstick collection perfectly, in a color you love and with a concealed bin, will be worth so much more than the bragging rights for Italian [faucets].

Related Links:

Bathroom Design Measurements Every Homeowner Should Know

Add This Shower Rod to Your Cart Now

How to Bring the Spa Home: Steam Showers 101

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