Tuesday, July 22, 2014
Monday, July 21, 2014
5 Pet-friendly Home Additions
Smart flooring
Linoleum flooring is becoming popular among designers because it has anti-microbial properties, it's easy to maintain and it is more environmentally sustainable than vinyl flooring, says Nancy Chwiecko, associate professor of interior design at the Rochester Institute of Technology in Rochester, N.Y., and author of the book "There's a Dog in the House."
Wood floors, too, are easier to maintain than carpet if you have a pet. Pick light to medium finishes, lower-luster glosses or distressed woods to help minimize scratches from pet nails. Keep your pet's nails rounded and short to prevent scratches.
If you prefer carpet, consider modular floor-carpet tiles from companies such as Flor because they can be replaced easily in case of accidents, Chwiecko says. Flor will recycle any returned tiles.
What if you have to move? There's no need to replace the floors, as long as they're still looking great.
Pet doors can be pricey, costing between $80 and $500. But there's an array of options, says Jon Mortensen, owner of Seattle-based PetDoorStore.com, which sells thousands of pet doors each year. There are doors for walls, screens, windows — even sliding-glass doors. Some doors are activated by microchip for more security; others are built to withstand 50 mph winds.
What if you have to move? "It's possible you may have to replace the door, but not certain," says Sharon Berry, a managing broker with Windermere Real Estate in Redmond, Wash. "It's all between the buyer and seller." If the buyer asks you to replace the door, the cost ranges from $700 to thousands.
"Pets can chew through plastic bottles, so keep medicines away from your pets," says Dr. Patricia Olson, chief veterinary adviser for the American Humane Association.
Remember, too, that cats and dogs like to chew on electrical cords, so tuck them away, unplug them or use plastic covers that snap over them. Child gates are an easy way to keep your dog away from certain areas of the house.
What if you have to move? Childproofing isn't a detriment to home value, Berry says. Buyers can remove these features if they don't want them. Childproof latches can be removed easily, as can child gates.
"People have the misconception that cats have good instincts and won't jump out," says Dr. Louise Murray, vice president of Bergh Memorial Animal Hospital in Manhattan.
During warm months, the hospital sees two to four cats a week that are hurt or killed in falls. She says that many people think that bars or child window guards will help, but cats can get through them. Cats will also jump from balconies and fire escapes, she says.
If you rent and do not want to spend money on permanent screens, you could purchase inexpensive, accordion-style screens that fit various-size windows.
What if you have to move? Most houses have screens, Berry says. There's no need to remove them if you sell your house.
Invisible fences can be a good option for people whose neighborhoods do not permit physical fences. But many pet experts do not recommend them because they can inflict pain, and some dogs test the fences every day. Some dogs also have also become more aggressive because they associate the shock from the fence with passers-by, Blake says.
If you have a physical fence, ensure it is in good condition and free of loose boards or metal that could hurt your pet or allow it to get out. Another tip: Keep benches and big rocks away from fences; they can be launching points for a dog to jump the fence.
What if you have to move? Good fences make good neighbors and make good overall sense to keep, Berry says.
Wood floors, too, are easier to maintain than carpet if you have a pet. Pick light to medium finishes, lower-luster glosses or distressed woods to help minimize scratches from pet nails. Keep your pet's nails rounded and short to prevent scratches.
If you prefer carpet, consider modular floor-carpet tiles from companies such as Flor because they can be replaced easily in case of accidents, Chwiecko says. Flor will recycle any returned tiles.
What if you have to move? There's no need to replace the floors, as long as they're still looking great.
Pet doors
If you work long hours or spend a lot of time away from home, pet doors can be a great way to make sure your dog isn't stuck inside the house for hours on end.Pet doors can be pricey, costing between $80 and $500. But there's an array of options, says Jon Mortensen, owner of Seattle-based PetDoorStore.com, which sells thousands of pet doors each year. There are doors for walls, screens, windows — even sliding-glass doors. Some doors are activated by microchip for more security; others are built to withstand 50 mph winds.
What if you have to move? "It's possible you may have to replace the door, but not certain," says Sharon Berry, a managing broker with Windermere Real Estate in Redmond, Wash. "It's all between the buyer and seller." If the buyer asks you to replace the door, the cost ranges from $700 to thousands.
Latches on cabinets and toilets
Childproof latches can be useful when you have a puppy or kitten that is fascinated with drinking or playing in the toilet or getting into cupboards. It's important to keep pets from getting into food, cleaners and medicine. Lysol-type cleaners, chocolate, raisins, grapes, macadamia nuts and xylitol sweetener in gum can be toxic — even fatal — for dogs. Spinach leaves, potpourri and acetaminophen, the key ingredient in Tylenol, are extremely toxic for cats."Pets can chew through plastic bottles, so keep medicines away from your pets," says Dr. Patricia Olson, chief veterinary adviser for the American Humane Association.
Remember, too, that cats and dogs like to chew on electrical cords, so tuck them away, unplug them or use plastic covers that snap over them. Child gates are an easy way to keep your dog away from certain areas of the house.
What if you have to move? Childproofing isn't a detriment to home value, Berry says. Buyers can remove these features if they don't want them. Childproof latches can be removed easily, as can child gates.
Window screens
If you live in a high-rise with open windows, screens are vital to keeping your pets safe, especially cats."People have the misconception that cats have good instincts and won't jump out," says Dr. Louise Murray, vice president of Bergh Memorial Animal Hospital in Manhattan.
During warm months, the hospital sees two to four cats a week that are hurt or killed in falls. She says that many people think that bars or child window guards will help, but cats can get through them. Cats will also jump from balconies and fire escapes, she says.
If you rent and do not want to spend money on permanent screens, you could purchase inexpensive, accordion-style screens that fit various-size windows.
What if you have to move? Most houses have screens, Berry says. There's no need to remove them if you sell your house.
Fence
"I think good fencing is vital," Chwiecko says. "You're going to have a happier dog, a happier family and happier neighbors."Invisible fences can be a good option for people whose neighborhoods do not permit physical fences. But many pet experts do not recommend them because they can inflict pain, and some dogs test the fences every day. Some dogs also have also become more aggressive because they associate the shock from the fence with passers-by, Blake says.
If you have a physical fence, ensure it is in good condition and free of loose boards or metal that could hurt your pet or allow it to get out. Another tip: Keep benches and big rocks away from fences; they can be launching points for a dog to jump the fence.
What if you have to move? Good fences make good neighbors and make good overall sense to keep, Berry says.
Sunday, July 20, 2014
Saturday, July 19, 2014
Friday, July 18, 2014
7 Pros and 7 Cons of Refinancing
Upside 1: Cheap loans
The low interest rates are the best reason to refinance now, says Andrew Schrage of Money Crashers, a personal-finance site. Recent numbers for 30-year fixed-rate loans are lower than the one-year introductory rates on adjustable-rate mortgages in most years since 1992.Upside 2: Improved loan period
In addition to lowering your rate, consider shortening the length of your loan. In the first years of a 30-year loan, you're paying almost all interest — it's not until the later years that you start paying principal. With rates this low, you can often both lower your monthly payment and shorten the length of your loan, saving thousands in interest, says Stuart Feldstein of SMR Research Corp., which does market research on the home-mortgage business.But there's an opposite school of thought on how to use a refi. Ric Edelman, founder of one of the country's biggest wealth-advisory firms, recommends refinancing into another 30-year fixed (or from a 15- to a 30-year) and using the savings on your payments for other investments that will generate higher returns. He adds that a longer mortgage term also nets you a bigger annual tax deduction — at least for now — than if you shorten the term.
Upside 3: More options
Be sure to shop around — the gap between the best and worst deals can be as much as a full percentage point, according to The Wall Street Journal.Elizabeth Weintraub, a Sacramento, Calif.-based real estate agent who covers refinancing issues for About.com, says consumers should go local when possible: "That face-to-face with somebody that you've actually met, it makes a difference versus somebody you're talking to on the phone." Borrowers looking to refinance also aren't under as much pressure as new homebuyers, she says. "When you do a refinance, you have the luxury of time to really investigate your options ... Because you can walk away from a refinance. You don't have to close that loan."
Upside 4: More leverage
Because so many loan providers are offering low rates right now, you'll have more negotiating power to get a better deal. Federal law requires lenders to give you an estimate of what they'll charge to complete your refi. Weintraub suggests bargaining to eliminate or reduce "garbage fees" that appear on your estimate — things like document preparation, wire transfer, courier, commitment and rate-lock fees — which can add $800 or more to the cost of the loan. "There's usually some flexibility there," she says. She even suggests that if the interest rate falls just before you close on your loan, you should ask the lender to give you the lower prevailing rate. "They'll say no, you can't do that, you've locked in your rate and you're stuck," she says. "But that's not true … if they find out you're going to cancel it, all of a sudden that rate comes down."Upside 5: Escape from adjustable-rate mortgages
Refinancing allows people with adjustable-rate mortgages (ARMs) to convert to fixed-rate loans, an advantage even if they don't save on their monthly payment immediately. "If you have an ARM, refinancing to a 30-year fixed can not only lower your rate but dramatically improve the safety of your loan by eliminating the risk that your rate might increase," Edelman says.Upside 6: Loan mergers
Refinancing lets you consolidate a second mortgage or a home-equity loan with your home mortgage, which can save money by allowing you to pay one low rate on the entire amount, instead of a low percentage on your primary mortgage and a higher one on the other loans.Upside 7: Cash in your pocket
If you have equity in your house, a cash-out refinance lets you pull out capital for productive uses, Schrage says. But don't make the mistake of so many people leading up to the financial crisis — draining equity to pay for vacations or consumer purchases."I'd only consider it for necessary expenses, such as a home renovation or [paying for] college…" he says.
Downside 1: Fees
Even if you get rid of junk fees, the cost of refinancing can offset the savings you'll get on a lower monthly payment under your new loan. Look carefully at the refinancing fees to make sure your savings will pay back those costs in a reasonable timeframe, says Don Martin, an independent financial adviser in Los Altos, Calif. Typical fees, the Federal Reserve says, range from $1,900 to $3,650, not including any loan origination fee (0 to 1.5 percent of the loan principal), private mortgage insurance (0.5 percent to 1.5 percent), or loan discount points (0 to 3 percent).Use a refi calculator to determine your break-even point — the number of months it will take you, at your lower payment, to recoup what the lender charges for refinancing your loan. To figure out when interest rates have fallen low enough to consider refinancing, use this calculator from the National Bureau of Economic Research.
Downside 2: Financial risk
Weintraub notes that in some states your initial mortgage is a "nonrecourse" loan — if you don't pay, the bank can foreclose your house and keep the proceeds from a sale but can't come after your other assets if there's a remaining deficit. But refinanced mortgage loans are usually "recourse" products — if you default and the sale of your house doesn't cover your loan amount, the bank can seize other assets. If you're worried about what happens in your state if you default on a refi, check with the state's housing finance agency.Downside 3: Few people qualify
Banks are being more selective given the lending problems that caused the housing crash, Feldstein says. People with even average credit scores may start the refinancing process but be rejected or pay a higher rate once banks check their scores. To get the lowest rates being advertised now, you'll need a score of 720 or above, Chris Boulter, president of loan specialist Val-Chris Investments tells Yahoo Homes.Downside 4: Prepayment penalties
Your original loan may include a penalty for paying it off early, which includes refinancing it. The Truth in Lending statement for the loan should include information on whether it has a penalty.You should include the costs of any penalty in calculating the time it will take you to break even on the refi. If you're refinancing with the same lender, try asking whether that penalty can be waived.
Downside 5: Less mobility
If you refinance, you'll have to stay in your house for at least a few years to recoup the fees you paid to get the lower monthly rate. Otherwise, Schrage says, you'll lose money on the deal. For example, on a refinance of $100,000 in which you drop your interest rate by 2 percentage points and pay $3,800 in fees, it would take about 32 months to break even.Downside 6: Little savings for recent refinancers
Many people have already refinanced in the past year won't save much by doing so again now. Feldstein says refinancing "may not be such a hot idea" if you're not going to drop your interest rate by at least a point and a half.Downside 7: Paperwork, paperwork
You have to suffer a little to get that lower rate. At a minimum, that means completing a lengthy loan application that allows for a complete review of your finances and employment history, including providing recent income-tax returns, pay stubs, investment and loan statements, and proof of checking and savings account balances. You'll also need to work with the loan officer to get a survey and appraisal completed, provide proof of homeowner's insurance, and sign off on a blizzard of documents at settlement."The loan-qualification process is more onerous than ever because of the credit crisis five years ago," Edelman says. So if you pursue a refi, he says, you're in for "an annoying couple of months."
Thursday, July 17, 2014
10 Reasons to Buy a Home
1. You can get a good deal. Especially if you play hardball. This is a buyer's market. Most of the other buyers have now vanished, as the tax credits on purchases have just expired. We're four to five years into the biggest housing bust in modern history. And prices have come down a long way– about 30% from their peak, according to Standard & Poor's Case-Shiller Index, which tracks home prices in 20 big cities. Yes, it's mixed. New York is only down 20%. Arizona has halved. Will prices fall further? Sure, they could. You'll never catch the bottom. It doesn't really matter so much in the long haul.
Where is fair value? Fund manager Jeremy Grantham at GMO, who predicted the bust with remarkable accuracy, said two years ago that home prices needed to fall another 17% to reach fair value in relation to household incomes. Case-Shiller since then: Down 18%.
2. Mortgages are cheap. You can get a 30-year loan for around 4.3%. What's not to like? These are the lowest rates on record. As recently as two years ago they were about 6.3%. That drop slashes your monthly repayment by a fifth. If inflation picks up, you won't see these mortgage rates again in your lifetime. And if we get deflation, and rates fall further, you can refi.
3. You'll save on taxes. You can deduct the mortgage interest from your income taxes. You can deduct your real estate taxes. And you'll get a tax break on capital gains–if any–when you sell. Sure, you'll need to do your math. You'll only get the income tax break if you itemize your deductions, and many people may be better off taking the standard deduction instead. The breaks are more valuable the more you earn, and the bigger your mortgage. But many people will find that these tax breaks mean owning costs them less, often a lot less, than renting.
The June 13, 2005 cover of Time.
4. It'll be yours. You can have the kitchen and bathrooms you want. You can move the walls, build an extension–zoning permitted–or paint everything bright orange. Few landlords are so indulgent; for renters, these types of changes are often impossible. You'll feel better about your own place if you own it than if you rent. Many years ago, when I was working for a political campaign in England, I toured a working-class northern town. Mrs. Thatcher had just begun selling off public housing to the tenants. "You can tell the ones that have been bought," said my local guide. "They've painted the front door. It's the first thing people do when they buy." It was a small sign that said something big.
5. You'll get a better home. In many parts of the country it can be really hard to find a good rental. All the best places are sold as condos. Money talks. Once again, this is a case by case issue: In Miami right now there are so many vacant luxury condos that owners will rent them out for a fraction of the cost of owning. But few places are so favored. Generally speaking, if you want the best home in the best neighborhood, you're better off buying.
6. It offers some inflation protection. No, it's not perfect. But studies by Professor Karl "Chip" Case (of Case-Shiller), and others, suggest that over the long-term housing has tended to beat inflation by a couple of percentage points a year. That's valuable inflation insurance, especially if you're young and raising a family and thinking about the next 30 or 40 years. In the recent past, inflation-protected government bonds, or TIPS, offered an easier form of inflation insurance. But yields there have plummeted of late. That also makes homeownership look a little better by contrast.
A house for sale in Shelby, Ohio. Associated Press
7. It's risk capital. No, your home isn't the stock market and you shouldn't view it as the way to get rich. But if the economy does surprise us all and start booming, sooner or later real estate prices will head up again, too. One lesson from the last few years is that stocks are incredibly hard for most normal people to own in large quantities–for practical as well as psychological reasons. Equity in a home is another way of linking part of your portfolio to the long-term growth of the economy–if it happens–and still managing to sleep at night.
8. It's forced savings. If you can rent an apartment for $2,000 month instead of buying one for $2,400 a month, renting may make sense. But will you save that $400 for your future? A lot of people won't. Most, I dare say. Once again, you have to do your math, but the part of your mortgage payment that goes to principal repayment isn't a cost. You're just paying yourself by building equity. As a forced monthly saving, it's a good discipline.
9. There is a lot to choose from. There is a glut of homes in most of the country. The National Association of Realtors puts the current inventory at around 4 million homes. That's below last year's peak, but well above typical levels, and enough for about a year's worth of sales. More keeping coming onto the market, too, as the banks slowly unload their inventory of unsold properties. That means great choice, as well as great prices.
10. Sooner or later, the market will clear. Demand and supply will meet. The population is forecast to grow by more than 100 million people over the next 40 years. That means maybe 40 million new households looking for homes. Meanwhile, this housing glut will work itself out. Many of the homes will be bought. But many more will simply be destroyed–either deliberately, or by inaction. This is already happening. Even two years ago, when I toured the housing slump in western Florida, I saw bankrupt condo developments that were fast becoming derelict. And, finally, a lot of the "glut" simply won't matter: It's concentrated in a few areas, like Florida and Nevada. Unless you live there, the glut won't have any long-term impact on housing supply in your town.
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