Home Equity Loans

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After home equity loans became nearly non-existent due to the market conditions, they are slowly making their way back. Here are 4 quick things to know about these loans:

1. Equity is a must: You must have at least 20% equity in your home before you can qualify for a home equity loan. Equity is the portion of your home that you actually own. For example, if you purchased your home for $200,000, the balance on your loan must be $160,000 or less.
2. Two types of loans: A standard home equity loan is when you borrow a single large sum of money. The second type is a home-equity line of credit, also called HELOC. With a home-equity line of credit, you can borrow smaller amounts of money over time, up to a fixed amount. When deciding between the two loans, consider whether you are doing an large project all at once which you need money for, or if you are going to be doing smaller scale projects over a period of time.
3. Not a good option for small loans: When taking out a home equity loan, they are usually not available for loans less than $10,000. Some banks don't utilize home equity loans for less than $25,000.
4. A home equity loan is a mortgage: Due to the fact that a home equity loan is a type of mortgage similar to the one you took out to purchase your home, there are certain pluses and minuses to taking one out. The interest paid on a home equity loan is tax deductible and the interest rates tend to be lower than those for a credit card or other types of loans you could use. With all of the benefits to home equity loans, it's important to remember that these loans are directly connected to your home so if you do fall behind on payments, your home can be foreclosed on.

A home equity loan may be the best choice for you, however, make sure you fully weigh the benefits and drawbacks before taking one out.

What Are The Most Germ Ridden Spots In Your Home?

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• Kitchen sponge or dishcloth: Bacteria love to grow on these items and the worst part is that when kitchen surfaces are wiped down, the bacteria is able to spread all over. To avoid this germ infestation, replace your sponges regularly and either run them through the dishwasher on the top rack or microwave them for 1-2 minutes in between replacements.
• Kitchen sink: Germs love to multiply in the kitchen sink so be sure to clean the sink and drain plug daily with a solution of bleach and water (one part bleach to 10 parts water). 
• Salt and pepper shakers: Cold viruses love to congregate on these so wipe them down with a disinfectant wipe regularly. 
• Coffee tables: Many of us come home after a long day and put our feet up on the coffee table while relaxing. This spreads many germs and bacteria from outside so leave your shoes at the door and disinfect coffee tables and other table surfaces.

What's Better-An Open Or Closed Kitchen?

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Open kitchen pros

• Brings the family together by integrating meal prep with other activities such as watching T.V. in the family room
• Allows guests into the center of the home and makes conversation between guests and the home cook easier
• Gets rid of walls that reduce natural light
• Adds the feeling of more space, especially in smaller homes

Closed kitchen pros

• Keeps messes in the kitchen hidden
• Having more walls means more space for cabinets, counters, and appliance storage
• Guests can't easily get into the kitchen to disturb the cook
• Cooking odors are more confined to the kitchen area
• The dining space is more formal

Both kitchen types have advantages; an ideal kitchen may have the best of both worlds. Some ways to achieve this are:

• A pass-through window: This can connect the kitchen to a living space without tearing down walls. Another option may be to take out a non-bearing wall (much cheaper and easier than removing a bearing wall) and replacing it with a half wall or peninsula. This is somewhat expensive but it will open up a closed off kitchen.
• Folding or pocket doors can be opened when you want a flow into the kitchen and closed when you don't. Use doors with glass to allow light in.
• Put in a raised bar/eating counter in your island: Facing the raised portion towards your living area will allow the space to be open while blocking the view of the food prep area.
• Putting in a half wall (40-50 inches tall) between the kitchen and living area offers both a physical and visual boundary for your kitchen yet the space is not completely closed off.
• Investing in quality, sound reducing appliances will be more of an investment than regular appliances but they won't disturb nearby conversations as much.

Fireplace Safety And Tips

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• Only burn dry, cured wood: It's best to use logs that have been split, cracked and dried for at least 8-12 months. Hardwoods such as white oak, hickory, beech, sugar maple, and white ash burn the longest, but using firewood that is dry is more important than the species.
• Only burn firewood: Burning crates, construction scraps, lumber, painted wood and other treated wood can release harmful chemicals into your home, degrading the air quality. Log starters are OK for getting the fire going, but they burn very hot and only one should be used at a time.
• Close the damper when the wood fireplace is not in use: If the damper is left open, that warm air you spend money on to keep in your home will escape out of the chimney. 
• Keep glass bi-fold doors open: Keeping these doors open while a fire is burning allows heat to get into the room. 
• Have a chimney cap installed: Chimney caps prevent objects, rain, and snow from falling into the chimney and they also reduce downdrafts. A chimney sweep can usually provide and install a stainless steel cap for around $50-$200. Stainless steel is a better choice than galvanized metal because it won't rust.
• Replace poorly sealed dampers: A top mounted damper that also doubles as a rain cap provides a better closure than a traditional damper and can prevent heat loss.
• Install carbon monoxide and smoke detectors: These are very important to have around your wood fireplaces as well as in bedrooms.
• Chimneys should be cleaned twice a year: If more than three cords of wood are burned annually, the chimney should be cleaned out twice a year. A cord is 4 feet high by 4 feet wide and 8 feet long, which is about the amount of logs that would fill two full sized pick up trucks.
• In order to burn a fire safely, build it slowly and add more wood as it heats up: Keep the damper of your wood fireplace open completely to increase draw in the beginning of the fire. Once in awhile, burn the fire hot, with the damper completely open, to prevent smoke from staying in the fireplace and creosote from developing. 

5 Smart Homebuyer Strategies

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1. Be specific: Let your Realtor know exactly what is most important to you  in a home so that you don't waste your time seeing homes that don't fit your criteria. Once you find the home that you love, submit a letter along with the offer letting the seller know what you love about the home and why it's a good fit for you and your family.
2. Get preapproved by a lender: Getting preapproved lets you know how much you can afford and also allows you to put in an offer more quickly. Your Realtor can also let the seller know you are preapproved which will help your case.
3. Shop within your range: It's a good idea to shop either within your price range or just under so that you are more prepared to make a full price offer or one slightly above asking price in the event that you enter a bidding war.
4. Be flexible: No home is totally perfect. In order to get more home for your money, consider purchasing an older home that may need some work in exchange for more square footage versus a home in a newer neighborhood that is more expensive for the same square footage. 
5. Be ready: Be ready to go and see a new listing with little notice. Be prepared to make an offer when you think you have found the home that is perfect for your family. Once a seller accepts your offer, decide on a closing date that not only accommodates your family, but the seller as well.

Budgeting For A Remodel

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• Estimate the costs: To begin, it's important to understand the realistic cost of your remodel job. In general, major upgrades, such as a bathroom overhaul or family room addition, cost about $100-$200 a square foot.
• Determine how much you have to spend: Once you figure out what project you want to do, you need to determine if you have the funds for it. If you are paying cash that's one thing, but if you are going to require a loan you need to find out what a bank will loan you and how that will affect your monthly budget. There are three basic types of loans; cash-out refinance, home equity loan, and a home equity line of credit (HELOC). For the majority of homeowners, the best way to borrow money for a home improvement project is a home equity line of credit. A HELOC is a good choice because it's a loan that is secured by your home equity which makes it qualify for a lower interest rate and you can deduct the interest on your taxes as well. The catch to a HELOC is that the monthly payment only covers that month's interest; this can make it easy to fall into a large amount of debt. To avoid this, you can use your own repayment schedule, paying 1/60th of the principal plus the interest every month over 5 years or 1/120th for 10 years. If you can't afford to do that, you may want to reconsider the project.
• Get quotes from contractors: Before talking with contractors, decide the details of the project including finishes and materials. This way, you are more likely to get a quote that is more accurate. Get quotes from at least 3 contractors and ask to see their recent work, check their references, and look at online sites that provide peer reviews of contractors. Once you find a contractor that you like, add a 15%-20% contingency for unexpected problems. If you can still afford this, get started! If not, it may be a good idea to rethink your plans.
• Tailor the project to fit your budget: If your dream project is not aligning with your budget, it might be time to revamp your plan. Start by asking your contractor for ways to lower costs such as using laminate counters instead of quartz or granite. Consider keeping older items that are in good shape such as appliances or lighting fixtures. Try making the project smaller; changing a 100 square foot project to an 80 square foot project can save a lot of money.

Checking Your Credit Before Purchasing A Home

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Before purchasing a home you need to meet with a lender to see about qualifying for a loan. Lenders will use your credit score from your credit report to see if you are a responsible borrower and therefore if you qualify for a loan with them. Credit reports are put together by three separate agencies, Equifax, Experian, and TransUnion.  Each of these agencies puts together information from your credit history and, using a formula put together by the Fair Isaac Corporation (FICO), determines your credit score. Each of your scores will be slightly different and lenders usually use your middle score when analyzing your credit history.

Your credit score is used to determine the rates and conditions of your loan. If you have a higher credit score,  lenders see you as a low risk investment meaning that you probably won't have difficulty paying back the loan and they will offer you a lower rate with good conditions. If your score is on the lower side, lenders may see you as a high risk investment and may offer you a loan with a higher interest rate. The maximum score is 850, although anything over 800 is pretty rare (only about 10% of applicants have a score above 800), any score in the 700's or higher is considered excellent and will usually get you a lower rate, and anything in the 600's can get a little more complicated. A score of 680 is still considered good but if your score falls below 660 some lenders may start denying you a loan.

If your credit score is on the low side or lower than you expected-don't worry too much. Your credit score changes over time and there are several ways to improve it such as making all of your payments on time and paying down existing debt. To know your numbers, you can head over to Credit.com and use their free Credit Report Card every month to see where you stand.