Friday, January 15, 2010
Wednesday, January 13, 2010
Mortgage Information
U.S.News and World Report gave some interesting mortgage information and predictions which I summarize for you here:
“More than 3 years into a painful housing crash, the real estate market has sent recent -albeit tentative signs of stabilization. Home sales have increased, inventory levels are down and price declines have become less precipitous.”
Lending standards have tightened in the last few years and some people predict further tightening ahead. “Generally to get the best rate around, you need a 20% down payment, says Guy Cecala, the publisher of Inside Mortgage Finance, an industry newsletter. That doesn’t mean that you can’t get a mortgage if you have less of a down payment… it just means that you may not get the best interest rates.”
Lenders are also looking for higher credit scores than previously. Currently, most lenders prefer to see a score of 730 or higher.
For those with lower credit scores and less down payment FHA loans offer a great alternative. Currently, a borrower needs a credit score of 690 or better and a minimum down payment of 3.5% to purchase a home and get an FHA loan.
Keep in mind that the mortgage industry is constantly changing. Rates and requirements can change at any time so it is important to consult with a reputable mortgage person and get the facts as they relate to your situation.
“More than 3 years into a painful housing crash, the real estate market has sent recent -albeit tentative signs of stabilization. Home sales have increased, inventory levels are down and price declines have become less precipitous.”
Lending standards have tightened in the last few years and some people predict further tightening ahead. “Generally to get the best rate around, you need a 20% down payment, says Guy Cecala, the publisher of Inside Mortgage Finance, an industry newsletter. That doesn’t mean that you can’t get a mortgage if you have less of a down payment… it just means that you may not get the best interest rates.”
Lenders are also looking for higher credit scores than previously. Currently, most lenders prefer to see a score of 730 or higher.
For those with lower credit scores and less down payment FHA loans offer a great alternative. Currently, a borrower needs a credit score of 690 or better and a minimum down payment of 3.5% to purchase a home and get an FHA loan.
Keep in mind that the mortgage industry is constantly changing. Rates and requirements can change at any time so it is important to consult with a reputable mortgage person and get the facts as they relate to your situation.
Monday, January 11, 2010
There is still time to take advantage of the home buyers tax credit!
Bringing the Dream of Homeownership Within Reach
As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed new legislation that:
•• Extends the First-Time Home Buyer Tax Credit of up to $8,000 to first-time home buyers until April 30, 2010.
•• Expands the credit to grant up to $6,500 credit to current home owners purchasing a new or existing home between November 7, 2009 and April 30, 2010.
Who Qualifies for the Extended Credit?
•• First-time home buyers who purchase homes between November 7, 2009 and April 30, 2010.
•• Current home owners purchasing a home between November 7, 2009 and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.
To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.
Which Properties Are Eligible?
The Extended Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.
How Much Is Available?
The maximum allowable credit for first-time home buyers is $8,000.
The maximum allowable credit for current homeowners is $6,500.
How is a Buyer's Credit Amount Determined?
Each home buyer’s tax credit is determined by two additional factors:
1.The price of the home.
2.The buyer's income.
Price
Under the Extended Home Buyer Tax Credit, credit may only be awarded on homes purchased for $800,000 or less.
Buyer Income
Under the Extended Home Buyer Tax Credit, which is effective on November 7, 2009, single buyers with incomes up to $125,000 and married couples with incomes up to $225,000—may receive the maximum tax credit.
These income limits have changed from the 2009 First-Time Home Buyer Tax Credit limits. If you or your client purchased a home between January 1, 2009 and November 6, 2009, please see 2009 First-Time Home Buyer Tax Credit.
If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?
Yes, some buyers may still be eligible for the credit.
The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $145,000 for singles and over $245,000 for couples are not eligible for the credit.
Can a Buyer Still Qualify If He/She Closes After April 30, 2010?
Under the Extended Home Buyer Tax Credit, as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.
Will the Tax Credit Need to Be Repaid?
No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale.
As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed new legislation that:
•• Extends the First-Time Home Buyer Tax Credit of up to $8,000 to first-time home buyers until April 30, 2010.
•• Expands the credit to grant up to $6,500 credit to current home owners purchasing a new or existing home between November 7, 2009 and April 30, 2010.
Who Qualifies for the Extended Credit?
•• First-time home buyers who purchase homes between November 7, 2009 and April 30, 2010.
•• Current home owners purchasing a home between November 7, 2009 and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.
To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.
Which Properties Are Eligible?
The Extended Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.
How Much Is Available?
The maximum allowable credit for first-time home buyers is $8,000.
The maximum allowable credit for current homeowners is $6,500.
How is a Buyer's Credit Amount Determined?
Each home buyer’s tax credit is determined by two additional factors:
1.The price of the home.
2.The buyer's income.
Price
Under the Extended Home Buyer Tax Credit, credit may only be awarded on homes purchased for $800,000 or less.
Buyer Income
Under the Extended Home Buyer Tax Credit, which is effective on November 7, 2009, single buyers with incomes up to $125,000 and married couples with incomes up to $225,000—may receive the maximum tax credit.
These income limits have changed from the 2009 First-Time Home Buyer Tax Credit limits. If you or your client purchased a home between January 1, 2009 and November 6, 2009, please see 2009 First-Time Home Buyer Tax Credit.
If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?
Yes, some buyers may still be eligible for the credit.
The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $145,000 for singles and over $245,000 for couples are not eligible for the credit.
Can a Buyer Still Qualify If He/She Closes After April 30, 2010?
Under the Extended Home Buyer Tax Credit, as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.
Will the Tax Credit Need to Be Repaid?
No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale.
Sunday, January 10, 2010
Freeze-Proof your pipes!
As winter temperatures go down, the risk of a frozen pipe goes up. Pipes can freeze in homes of any age and condition, and no matter what type of material your pipes are made from. So don't make the mistake of thinking that because your house is new it's safe, or because your house is older the materials are somehow stronger. The only way to prevent a frozen pipe is to keep it warm, and luckily that's not too hard to do.
Pipes are vulnerable any time they're in a location where they're exposed to low-enough temperatures for long-enough periods that the water inside them can freeze. Once the freezing occurs, the water expands, rupturing the pipe, splitting the seam between the pipe and a fitting, or damaging components such as cartridges inside faucets. Once the pipes warm up and the ice melts again, the damage becomes evident -- often in the form of a flood inside the house!
Although a frozen pipe can occur just about anywhere, pipes in unheated attics and underfloor basements and crawl spaces are at the most risk. And ironically, the better you insulate the ceiling and the floor, the more you put pipes in those areas at risk. Heat that had been escaping from the house into those areas used to be keeping the pipes warm, so when you add insulation and stop heat loss from the house, the attic, basement and crawl space become colder, and pipes are more vulnerable.
Keep the water pipes insulated
Any water pipes that are not buried in your underfloor, wall or attic insulation need to be insulated. The easiest method for the do-it-yourselfer is to use a foam sleeve, which is pretty much like slipping a bun over a hot dog. The sleeves are actually long foam tubes, and are available with different interior diameters to fit different pipe sizes. The tubes are slit along one side, so installation is simply a matter of opening up the slit and fitting the tube over the pipe.
At each elbow or other fitting in the pipe, cut out a wedge from one side of the tube so that it will bend around the joint in the pipe. Cutting can be done with scissors or a sharp utility knife. After you bend the tube around the fitting and snap it over the next pipe, it should stay in place on its own, and the seams and elbows don't require any sealing. If you do need to seal any odd joints or patch in any small pieces, you can hold things together with utility tape from the home center or hardware store where you purchased the foam sleeves.
The pipes can also be wrapped using scraps of fiberglass insulation. This is less expensive than the foam sleeves, but a little more time consuming if you're not used to the process. Typically, fiberglass batt insulation is cut into strips. It's then wrapped around the pipes, either in a spiral fashion or by folding it lengthwise over the pipe. As the insulation is installed, it's held in place with a spiral wrapping of very fine copper wire, which is available on spools from any hardware store or home center.
Close foundation vents and look for air leaks
Now for a small bit of controversy, which is almost sure to generate a letter or two: Close off your foundation vents! Use foam blocks or other insulation, and seal the vents to prevent cold air from entering. The vents are there to allow air to circulate under the house and remove unwanted moisture, and they should remain open during whatever part of the year that temperatures remain above freezing. But during the winter, when humidity levels are low and the risk of a frozen pipe outweighs the need for ventilation, be sure they get closed off.
Attic vents are a different story. Due to their location and the year-round need for attic ventilation to prevent ice damming, they should not be closed off. You should, however, carefully examine the area around each vent to be certain that no pipes are exposed to the air coming in from the vent.
If you find a pipe that is adjacent to a vent, double up the amount of insulation that's on the pipe, and permanently close off that portion of the vent that's directly exposed to the pipe.
Another thing that can greatly increase the chance of a pipe freezing is to expose it to outside air. This often happens when the pipe is installed near a foundation vent or an attic vent, or in an exterior wall in which holes were drilled for plumbing or wiring.
In any open walls, use expandable foam sealant to close off any holes and gaps in the framing. In colder climates, pipes should never be installed in exterior walls, and pipes should never be run in exposed soffits or other uninsulated framing areas.
Exterior faucets are another potential freeze problem. When installing a new exterior faucet, your best bet is to use a freeze-proof type (freeze-proof faucets are required by code in some areas), which has a long stem that extends back into the insulated portion of the house, so it shuts the water off at a spot where it's not exposed to freezing outside air.
If your house is not equipped with freeze-proof faucets, you can insulate them quickly and easily by installing an insulated dome over them. The dome is simply a large foam shell that fits over the faucet, and is held in place with a strap or a long hook.
All of the materials you need for pipe insulation, including faucet domes, pipe wraps, wire and other material, can be found at any home center or plumbing supply retailer, as well as hardware stores, discount stores and most lumber yards.
Pipes are vulnerable any time they're in a location where they're exposed to low-enough temperatures for long-enough periods that the water inside them can freeze. Once the freezing occurs, the water expands, rupturing the pipe, splitting the seam between the pipe and a fitting, or damaging components such as cartridges inside faucets. Once the pipes warm up and the ice melts again, the damage becomes evident -- often in the form of a flood inside the house!
Although a frozen pipe can occur just about anywhere, pipes in unheated attics and underfloor basements and crawl spaces are at the most risk. And ironically, the better you insulate the ceiling and the floor, the more you put pipes in those areas at risk. Heat that had been escaping from the house into those areas used to be keeping the pipes warm, so when you add insulation and stop heat loss from the house, the attic, basement and crawl space become colder, and pipes are more vulnerable.
Keep the water pipes insulated
Any water pipes that are not buried in your underfloor, wall or attic insulation need to be insulated. The easiest method for the do-it-yourselfer is to use a foam sleeve, which is pretty much like slipping a bun over a hot dog. The sleeves are actually long foam tubes, and are available with different interior diameters to fit different pipe sizes. The tubes are slit along one side, so installation is simply a matter of opening up the slit and fitting the tube over the pipe.
At each elbow or other fitting in the pipe, cut out a wedge from one side of the tube so that it will bend around the joint in the pipe. Cutting can be done with scissors or a sharp utility knife. After you bend the tube around the fitting and snap it over the next pipe, it should stay in place on its own, and the seams and elbows don't require any sealing. If you do need to seal any odd joints or patch in any small pieces, you can hold things together with utility tape from the home center or hardware store where you purchased the foam sleeves.
The pipes can also be wrapped using scraps of fiberglass insulation. This is less expensive than the foam sleeves, but a little more time consuming if you're not used to the process. Typically, fiberglass batt insulation is cut into strips. It's then wrapped around the pipes, either in a spiral fashion or by folding it lengthwise over the pipe. As the insulation is installed, it's held in place with a spiral wrapping of very fine copper wire, which is available on spools from any hardware store or home center.
Close foundation vents and look for air leaks
Now for a small bit of controversy, which is almost sure to generate a letter or two: Close off your foundation vents! Use foam blocks or other insulation, and seal the vents to prevent cold air from entering. The vents are there to allow air to circulate under the house and remove unwanted moisture, and they should remain open during whatever part of the year that temperatures remain above freezing. But during the winter, when humidity levels are low and the risk of a frozen pipe outweighs the need for ventilation, be sure they get closed off.
Attic vents are a different story. Due to their location and the year-round need for attic ventilation to prevent ice damming, they should not be closed off. You should, however, carefully examine the area around each vent to be certain that no pipes are exposed to the air coming in from the vent.
If you find a pipe that is adjacent to a vent, double up the amount of insulation that's on the pipe, and permanently close off that portion of the vent that's directly exposed to the pipe.
Another thing that can greatly increase the chance of a pipe freezing is to expose it to outside air. This often happens when the pipe is installed near a foundation vent or an attic vent, or in an exterior wall in which holes were drilled for plumbing or wiring.
In any open walls, use expandable foam sealant to close off any holes and gaps in the framing. In colder climates, pipes should never be installed in exterior walls, and pipes should never be run in exposed soffits or other uninsulated framing areas.
Exterior faucets are another potential freeze problem. When installing a new exterior faucet, your best bet is to use a freeze-proof type (freeze-proof faucets are required by code in some areas), which has a long stem that extends back into the insulated portion of the house, so it shuts the water off at a spot where it's not exposed to freezing outside air.
If your house is not equipped with freeze-proof faucets, you can insulate them quickly and easily by installing an insulated dome over them. The dome is simply a large foam shell that fits over the faucet, and is held in place with a strap or a long hook.
All of the materials you need for pipe insulation, including faucet domes, pipe wraps, wire and other material, can be found at any home center or plumbing supply retailer, as well as hardware stores, discount stores and most lumber yards.
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