Prep Your Budget For Buying A Home

Choosing to enter the home buying process is likely the largest financial decision you will make in your lifetime, so it is not one that should be taken lightly. Ensuring that your other current and upcoming financial responsibilities are under control is crucial to having a smooth transaction and being able to enjoy your investment fully. These tips will help you prepare your budget for purchasing your dream home.

Calculate your monthly income. How much money is coming in every month? This is the amount that is left after taxes, health insurance, and retirement savings are taken out of your monthly salary.

Understand your current expenses. Make a list of all your current recurring expenses month to month. Don’t forget to factor in things like loan payments, gym memberships, car maintenance, groceries, self-care appointments, etc.

Determine where you can find savings. Are there any ongoing memberships or subscriptions you don’t use that can be canceled? Can you cut out your daily coffee or eating out lunch? Make these adjustments right away to start saving more.

Boost your financial standing. Before buying a home, it is recommended that you dedicate extra effort to paying off other debts and boosting your credit score. Taking these steps will help you during the loan approval process.

Don’t move finances around. Your lender will review your bank statements during the pre-approval process and then again during underwriting. Any large withdrawals or deposits may throw a red flag so try to avoid these when possible. If you can’t, make sure you have proper documentation to explain the movement of money.

Top Tips For Decorating With Area Rugs

Looking for a fun way to bring an additional pop of color or design to a room with minimal time or money investment? Consider trying out an amazing area rug! Check out these tips for revamping your space with this fun decor piece.

Consider your lifestyle. Do you have two dogs and a cat? A couple of young kiddos running around? You’ll want to take these factors into consideration. Choose a dark color tone to help hid inevitable stains and make sure the material you choose is easy to clean.

Choose the right size. Expert interior designers recommend choosing a rug that is just slightly smaller than the area covered by furniture, leaving enough space between it and the walls for the flooring to still shine through.

Try these trends. Big bold patterns and rich colors are trending in the interior design space right now and rugs are no different. Try using one as the focal point of the room and select neutral-colored furniture to complement it. Build around the rug. Find a rug that makes a big statement and then builds the room around it. Select furniture placement, accent pieces, and colors based on what ties into it. Define the area.

Looking for a way to create two different areas within a single room? Rugs can help you achieve this by defining where one area begins and other starts, such as a reading nook and dining area. Layer multiple. This daring new trend has just popped up on the interior design circuit. Choose two rugs of different shapes and textures and layer them to create depth and a unique focal point.

4 Things You Need To Know About Making An Offer

You’ve narrowed down your wish list, viewed many homes, and finally found your perfect fit. Time to take the leap and make an offer! This can be both incredibly intimidating and exponentially exciting. So how can you throw your hat into the ring with confidence? Here’s what you need to know to make an offer like a boss!

1. Determine Your Price Limit

Work with your agent to determine if the seller’s listing price is fair based on similar home sales in the area, interest in the home, time on the market, and more. Then, figure out the max offer price you are willing to reach that isn’t too financially taxing and settle on what your starting offer price will be.

2. Add Contingencies

Any home sale generally comes with a set of contingencies that must be met before it can be completed. These can include inspections, repairs, appraisals, and more. These need to be selected carefully, as an offer with too many may be less appealing to the seller.

3. Set Your Settlement Date

When you submit an offer, you must present a date to settle, generally about 60 days after the purchase agreement is signed. You want to give yourself enough time to meet your end of the contingencies, secure mortgage approval, finalize loan details, and more. If you are the responsible party for a delay, you may have to compensate the seller.

4. Prepare For A Counteroffer

You may be going up against other offers or the seller may negotiate, so it’s best to prepare ahead of time for a counteroffer. But this isn’t anything to stress about. Talk through the best strategies with your real estate agent.

What You Should Know About Using Home Equity

One of the huge benefits of owning property is the home equity you can build. But with equity comes the temptation to dip into it if a large expense or possible investment arises. There are many strategic ways to use your equity without ruining any personal financial advances you have made. The most crucial step you need to take is to fully understand your options for tapping into that money and the associated risks.

Simply put, your home equity is the market value of your home relative to any loan balances remaining. There are two main ways to utilize this value. Getting a home equity loan provides you with a lump sum of money that you pay off in monthly installments, generally over five to 15 years. As with any loan, you will be required to pay interest on the amount, but it is usually a fixed rate. Choosing to use a line of credit instead offers similar benefits, but instead of receiving the money up front, you are given a pool you can draw from as needed. With this option, the lender provides a maximum borrowing limit and you can choose to use it or not until it is reached.

Before dipping into your home equity in, either way, it is important to understand the possible consequences. In both instances, your home is used as loan collateral. This means if you are unable to make payments on the loan for any reason, the lender can sell your property or take your home in foreclosure. Additionally, there will likely be closing costs and fees you have to pay in association with the loan.

Hidden Fees To Be Aware Of When Purchasing A Home

Purchasing a home is arguably one of the biggest financial decisions you will make in your lifetime. As you start your hunt, don’t forget there will be other costs associated with your purchase then the price of the home. Here are 5 fees to keep in mind as you begin to budget.

HOME INSPECTION

This is a crucial step in the home buying process. The findings that come from the inspection can help you negotiate price and repairs. Generally, you can expect to pay between $300 to $500 depending on the home and the location.

TITLE SERVICES

Title services encompass the transfer of the title from the seller and a thorough search of the property’s records to ensure to no one will pop up with a claim to the property. Additionally, you may need to buy title insurance which will protect the lender or your investment in the home.

APPRAISAL FEE

Before getting a loan, you will likely be required to get an appraisal of the home to determine its estimated value. This will be conducted by a third-party company and the cost can land anywhere between $300 and $1,000, depending on the size of the home.

HOA FEES

Many communities have a homeowners’ association that enforces monthly fees. This money is used for general maintenance and updates to areas like pools, parks, and more. Typical HOA fees are around $200 per month.

TAXES

The taxes each buyer pays at the closing table differ, but it is not uncommon for it to be up to two months’ worth of county and city property taxes. Additionally, there may be taxes for the transfer of the home title.

Create The Home Office Of Your Dreams

Whether you work full-time at home or occasionally need to conduct business in the evenings or on the weekends, a home office a great way to utilize an extra room. A dedicated workspace in your home can be designed to increase productivity and comfort. Here are 5 ideas to get you started.

CHOOSING A CHAIR

Invest in a good office chair. Investing in an ergonomic office chair is essential. You may be spending anywhere from 30 to 50 hours a week sitting in it, so your back will thank you. Purchasing one with multiple adjustments is ideal so it fits you just right.

THE RIGHT LIGHTING

Switch up your lighting. Fluorescent lighting has been proven to be hard on the eyes. Make the switch to LED or halogen light bulbs in your home office and try to let in as much natural light as possible. Also, consider finding a desk lamp to reduce headaches and eye strain.

KEEP IT CLEAN

Keep essentials in reach and organized. Nothing says productivity like a clean, neat workspace. Select a desk with a lot of storage or install creative shelving to keep items like pens, pencils, extra batteries, calculator, notepads, and more stored within arm’s reach.

SPICE IT UP

Decorate bright. Pick a color you love and use it to spice up the room. Use cheery yellow or red or relaxing tones like green and blue, instead of beiges and browns.

IT’S ALL ABOUT THE VIEW

Aim for the view. If possible, place your desk so you are facing a window instead of a blank wall. Natural light can do wonders for staying alert and you can give yourself a short mental break when necessary by looking to the outdoors.

5 Fall Design Ideas That Will Boost Your Creativity

As homeowners pull out Halloween decorations, however, they often take the opportunity to look around their homes and make some more permanent changes. Whether it means splashing walls with a fresh coat of paint or rolling out a new rug, even the smallest changes can make a difference in the way a home looks.

With the cooler fall temperatures, this is the perfect time to tackle those interior design projects homeowners have put off all summer. As an additional bonus, your home will be ready for entertaining friends and family this holiday season. Here are eight of the latest design trends to help inform your decisions as you redo your own living spaces.

Reclaimed Wood

Not only is reclaimed wood good for the environment, but it is attractive, as well. You can craft everything from light fixtures to desks using salvaged wood.

Space-Saving Design

Even if you aren’t challenged for space in your new home, you can always use more space. With a little creativity, you can free up extra storage space and extend the size of your home.

Mixing Metals

Historically designers have worked hard to achieve uniformity in the metals in a room. If a kitchen had stainless steel appliances, the last thing a designer would consider was gold knobs and handles on cabinets. But multiple metals in one room is gaining in popularity, as demonstrated in these designs.

Mismatched Colors and Patterns

Instead of painstakingly matching every item in each room, this new design trend frees you up to pair items that wouldn’t have normally been matched. With the right touch, you can even make different patterns and clashing colors work together.

Mixing Some Old with Some New

It’s a great time for homeowners on a limited budget, since budget decorating is all the rage. Combine new items with finds from thrift stores and garage sales for a trendy, eclectic look that catches the eye and impresses guests.

This fall, update the look of your home with one of these exciting design trends. You’ll have something to show off when family visits for the holidays and you’ll give your home a new look going into the new year. Best of all, many of these ideas can be done with minimal expense, keeping your budget free as you prepare for the gift-buying season.

Remodeling Mistakes You Should Avoid

Remodeling your home? If so, there’s some planning required on your part before you dive into whatever project you’re working on. Keep in mind that while certain things you do will help the project in a positive way, there are also things that you might do that could totally sabotage your efforts.

Are you a novice at home remodeling? Then make sure you don’t make the following mistakes:

Not Making All Necessary Decisions Before Moving Forward

If you don’t take the time to scope out every detail of your project before construction even starts, you’re making a huge mistake. A reputable contractor will understand this, and will carefully walk you through the entire project from A to Z in order for you to be able to anticipate all the scenarios that might pop up along the way. But in addition to these scenarios that need to taken into consideration, you’ll also need to think about things like paint colors, faucet selection, hardware choices, and other details like these.

You might think these are minor decisions that need to be made, but you’d be surprised at how much they can influence the overall product. The hardware you choose might not be the ones delivered, or the faucets you want might be on backorder. Things like this can make a 4-week project turn into an 8-week ordeal.

Make sure you make these decisions well in advance to avoid any hiccups.

Not Having a Detailed Floor Plan Designed

Working without a design drafted up is a huge faux-pas. How are you going to know precisely how everything will be laid out without a solid floor plan? There are tons of elements that go into making up a space, and having a detailed plan in place will help you nip any problems in the bud before they become major issues.

Your best bet? Hire an architect and a designer.

Changing Your Mind Too Often

OK, so it’s pretty common for people to change their minds about a previous decision made when it comes to home renovations. And while this might be fine the odd time, changing your mind too many times can not only completely complicate the project, but it will also cost you a lot more at the end of the day.

Every time you change your mind about something, it’ll result in a charge order. This costs money. You’ll also be throwing off the scheduling with every little change you order. Think about it: the change need to be communicated to everyone on the job so that they can ditch the old plan and get with the new. This will basically delay the completion of the project.

It’s fine to make a change here and there, but you need to be aware of how this will affect the overall job.

Not Having an Emergency Fund

Planning ahead is key, not only to make sure the end product is exactly what you had envisioned, but also to make sure the project stays with your budget. But of course, it’s highly unlikely for home remodeling projects to stay well within budget, which is why an emergency fund needs to be set up and kept on the side in case the costs are a little more than you had initially anticipated (and they probably will).

If you plan well enough from the get-go, you should be able to comfortably get away with a 5% or 10% contingency.

Putting a Bandaid on a Major Problem

You might want to reface your kitchen cabinets, for instance, but sometimes a lot more work will be needed. There may be times when the entire kitchen cabinetry may need to be ripped out and replaced entirely if the materials are rotting or sagging. There may even be times when entire walls may need to be replaced, or in much more extreme cases, the entire house may need to be ripped down as is the case with faulty foundation.

Be honest with yourself, and be realistic about what really needs to be done so that you’re not just covering up a problem temporarily. Listen to the advice of your contractor about what he suggests needs to happen. Hopefully, you’ve chosen a competent and reliable contractor who will give you open, honest answers that are best for you, and not just for his wallet.

Don’t Get in the Way

Want to disrupt the workers and delay the completion of your project? Getting in the way will do just that. Sure, you want to make sure everything is going the way you want it to, but don’t be a nag. Sorry to sound brash here, but every time the workers need to stop to talk to you or to work around you, it causes a delay (not to mention annoys the workers).

If the conversation is important enough that it can’t wait, that’s one thing. But to chat up the plumber or electrician about every minor thing is just a downright distraction.

Do yourself a favor – hire a contractor, and other professionals involved in home remodeling. They’ll give you a plethora of advice about you should and shouldn’t do before, and during the construction. Doing your due diligence will not only save you time and headaches, it’ll save you money too.

How to Boost Your Chances of Getting Approved For A Mortgage

Roughly 8% of all mortgage applications are denied by lenders. But as challenging as it can be to get approved for a mortgage, it’s not impossible, as long as you’ve got all your ducks in a row. Here are a handful of reasons why borrowers are denied mortgages, and what can be done to offset them.

INSUFFICIENT INCOME

The money used to pay for your mortgage has to come from somewhere. If your income is not sufficient enough to afford a specific loan amount, you’ll likely be rejected. And if you’ve recently changed your line of work or went from a salaried position to a freelancer, your home loan application stands a better chance of rejection based on income.

Even if you’ve got sufficient income, maybe it’s not properly documented. Having a pile of cash doesn’t make you a shoe-in for a successful mortgage applicant. If you can’t adequately prove your ability to afford the loan and support your income with tax records, lenders don’t have anything to go on. This can often happen to self-employed individuals who don’t have proper accounting practices in place. Many jobs that are paid for in cash aren’t documented with the IRS, so there’s little paperwork existing to back up income.

SOLUTION: Make sure all your income is properly documented. You might think you’re saving a few bucks by not making full tax claims to the IRS, but doing so will leave you with limited documentation as far as your actual income is concerned.

CREDIT ISSUES

Among all the factors lenders look at when assessing borrowers, credit score is a big one. Generally, lenders will be apprehensive about loaning capital to borrowers whose credit score is under 600, but the ideal benchmark is a score of 740. If your score is in the 500’s or lower, odds of getting approved for a mortgage are pretty slim, if not impossible.

And even if you are approved, the interest rate you’ll be charged will likely be pretty high. Every 20-point increment lower than 740 means the loan is more likely to result in default. In order to compensate for this risk, lenders will increase the cost to the borrower by increasing the interest rate.

SOLUTION: While repairing your credit score won’t happen overnight, there are plenty of things that can be done to gradually bring a low score up to snuff. The first thing you should do is find out what your score is by pulling your credit report through one of the three credit bureaus. You never know – there might be errors in your report that are bringing your score down unnecessarily. If that’s the case, you can insist on an investigation to rectify these mistakes.

You should also resist the urge to make large purchases on credit, such as a new car. And now is not the time to start applying for new credit cards either. If you’ve already got a credit card or two, make sure you don’t go over the credit limit. In fact, try to stay as far away from the limit as possible.

And as always, pay your bills on time, in full, and as quickly as possible.

UNFAVORABLE DEBT-TO-INCOME RATIO

Even decent income might not be enough to secure a mortgage approval if you’re growing in debt. Lenders look at many factors, including a borrower’s debt-to-income ratio, which is basically the percentage of your monthly gross income that’s dedicated to paying off your monthly debt. If this number is too high, you’ll likely be denied a mortgage. Ideally, lenders want to see a debt-to-income ratio that’s no higher than 38%, which is the percentage of your income devoted to your debt payments. You wouldn’t want to get stuck with a mortgage if your ratio is that high, anyway – nobody wants to wind up “house poor.”

If you’ve got certain factors that can balance out your debt and help your financial situation – such as a high credit score or lots of home equity – lenders may be willing to bend a little, but only up to a maximum of 45%.

SOLUTION: You can help the situation by calculating your debt-to-income ratio before you even apply for a mortgage. If you come up with a number that’s higher than 38%, now’s the time to make some changes to drop it down. Think of some ways to reduce excess debt or increase your income. Take steps to strengthen your credit score, such as ensuring all debt payments are made on time and in full every month. Find ways to beef up the down payment so the amount of loan you apply for is reduced.

UNDER-APPRAISAL OF PROPERTY PURCHASED

Lenders want to make sure the property being financed is actually worth what you’ve agreed to pay for it. That’s why they send out an appraiser to assess what the property is worth under current market conditions. If the property is deemed to be worth less than what you bought it for, you stand a good chance of getting rejected for a home loan.

You’ll only be loaned an amount of money that is justified by the home’s value. The lender will be put at risk if more money is loaned compared to what the property can realistically be sold for should you default on your mortgage. To minimize this risk, lenders will simply deny a loan amount based on the appraisal of the home.

SOLUTION: You can ask to have the property re-appraised by another appraiser. Maybe the one appointed wasn’t fully qualified, or didn’t use all the pertinent data needed to make an accurate assessment. You can also use the appraisal as a negotiating tool with the seller to try and have the price reduced.

GAPS IN THE ACTUAL APPLICATION

Mortgage applications aren’t exactly fun, nor are they usually completed in a couple of minutes. But making sure that they are filled out in entirety and that all information provided is 100% accurate is essential. Not only can gaps in the application itself delay the mortgage process, it can derail it completely.

SOLUTION: Go through your application with a fine-tooth comb to make sure you haven’t missed anything, and that all information provided is complete and verifiable. Mortgage brokers are there to help you with the process, so don’t hesitate to connect with these professionals when filling out these important documents.

THE BOTTOM LINE

Nobody applying for a mortgage wants to see the words “REJECTED” splashed across their application. But there are things you can do right now to avoid this ugly scenario. Working with a professional mortgage specialist can help you identify potential problems with your financial portfolio, and set you up for success when you’re finally ready to apply for a home loan.

Should You Paint or Stain Your Kitchen Cabinets For an Easy Upgrade?

If you’re looking to change or update the look of your kitchen on a budget, simply changing the face of your cabinets can work wonders. Not only is this a cost-effective option, it can completely alter the look and feel of your kitchen.

Two ways to make a change to your kitchen cabinets is to either paint or stain them. The question is, which option should you choose?

Painting Your Cabinets

If you’ve been paying attention to the world of interior design, you probably noticed that painted cabinets are on-trend lately. Whether they’re steel blue, mustard yellow, emerald green, or classic white, painted cabinets are all the rage.

The exact type of paint that you choose for your cabinets will affect how they look, how well they can withstand wear and tear, and how resistant they are to water. Aside from the color, there are many paint options, including oil-based, water-based, or even varnishes. You will want to discuss each option and their effects (such as lifespan, off-gassing, and so forth) with a paint professional before you make your choice.

Another factor to consider is how the paint will be applied to the cabinets: either sprayed on or brushed on. Spraying the paint typically provides the most even, smooth finish; however, if you ever need to touch it up in the future, it could be a challenge to get a blemish-free finish. On the other hand, brushed-on paint might not have as consistent a finish as a spray-on version, but it will be a lot easier to touch it up as the need arises.

The type of wood also matters if you’re leaning towards paint over stain. In order to achieve a smooth finish, the wood needs to have a completely flat surface and be void of knots and heavy grains.

Paint offers certain benefits that stain simply can’t deliver:

It’s modern

If it’s an updated, contemporary look that you’re after, then paint is the way to go. If you’ve got old-fashioned wood cabinets – such as oak, which has fallen out of style – paint can disguise any grains in the wood that you’re no longer a fan of.

It provides a ton of options

Considering the seemingly endless variety of paint colors to choose from, the options are vast when it comes to creating a truly unique look to your kitchen.

It hides dust easily

Compared to stained wood, painted cabinets hide dust much better, especially lighter colors.

However, there are some downsides to painted cabinets as well:

It’s expensive

Generally speaking, it costs more to paint cabinets than to stain them because it entails a lot more time and elbow grease. If you are having your cabinets painted by a professional, you’re looking at paying anywhere between $2,000 to $5,000, depending on the size of the kitchen, how complex the job is, and where you live.

It can crack over time

Painted cabinets are more susceptible to cracking as time passes which can make the cabinets look worn and dated.

Staining Your Cabinets

If you love the grain of a certain type of wood, then staining your cabinets is a fantastic option. While stained cabinets are more traditional-looking than painted cabinets, they still provide a classic, timeless look.

Stained cabinets let the natural features and grains of the wood show through. You can choose from a variety of stains, from clear to a very dark mahogany or chocolate brown that adds a dramatic touch while still letting the wood’s grain and texture show through. You also have the freedom to choose the type of finish you’d like, including glossy, semigloss, and matte. Some stains even have UV protection.

Stained wood cabinets come with their own set of advantages over paint:

They’re classic

While old oak cabinets are somewhat dated, many other types of stained woods are timeless. As such, stained wood cabinets are still rather popular among homeowners simply because they are less prone to going out of style and are not dependent on the latest trends in kitchen design.

They’re good for resale value

Because of their classic and timeless look, stained cabinets are often better for resale value than painted cabinets.

They’re more affordable

Since staining cabinets doesn’t take as long as painting them, staining is the cheaper way to go.

On the other hand, there are some disadvantages to stain:

The wood needs to be attractive

Stain is meant to show the grain of the wood, so if you are not a fan of the type of wood your cabinets are made of, stain is likely not the best option.

There aren’t as many design options

You can’t get nearly as much variety with your stain as you can with paint colors.

The Bottom Line

When it comes time to make a decision about the finished surface of your kitchen cabinets, make sure you test each option with your actual cabinet material so you can have an actual visual of what the finished product will look like. In addition, have samples of your countertops and backsplashes readily available to match up with the cabinets so you can verify how everything goes together before making your final decision.