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Real Estate

Are Solar Panels Right for My Home?

Solar power is becoming a popular energy alternative for many homeowners. A lot of consumers spend thousands of dollars on their energy bill each year. So, it’s no wonder why energy-conscious homeowners are looking to solar energy as a way to save money.

However, solar power isn’t for everyone, and not every home is an ideal candidate. Here are some tips to help you decide if solar energy is a viable option for your home.

Is My Home a Good Candidate for Solar?: 5 Things to Consider

1. Your Energy Bill

The Average Monthly Energy Bill According to Energy Information Administration (EIA) was $117.65 in 2018 and continues to climb each year. How much are you currently paying for electricity?

Can you handle the expense each month? Or do you often struggle to pay your electric bill? If your monthly electricity bill is at least $75, then going solar might be right for you. That’s because you’ll be paying less for your energy and have the ability to sell the excess.

On the other hand, maybe you live in an area where electricity isn’t expensive at all. Or perhaps you’re just super frugal and are serious about conserving energy, so your bill is a lot lower than average. If this is the case, going solar may not be worth it.

2. The Type of Roof You Have

If you have a weak roof, then your home may not be a good candidate for solar energy. That’s because your roof needs to be strong enough to support solar panels.

Roofs that are made of durable materials such as asphalt or composite shingles are usually the most suitable candidates. However, clay or metal roofs typically aren’t the best for solar panels.

Tile also isn’t a great candidate because they’re trickier to work with. They’re often brittle, and installation may damage the waterproofing under the tiles.

While it’s still possible to install solar panels on clay, metal, and tile roofs with the help of a professional, wood roofs aren’t good candidates for solar at all. They can be a fire hazard.

If you don’t have the best roof for panel solar installation, you might try another option such as a ground-mounted system or a mobile solar power system.

3. The Condition of Your Current Roof

In addition to the type of roof you have, the condition of your roof is also an important factor to consider when it comes to going solar.

If you want solar panels installed, it’s best to have a roof in good condition that won’t need to be replaced in the near future. Otherwise, you’ll have to get your solar panels removed just to replace your roof and then, install the panels all over again, which can get expensive.

So, if your roof isn’t in the greatest condition, it’s best to get it repaired or replaced before a solar installation. If you think your roof might need repairs or replacement, you can find help with partners like HomeAdvisor.

4. The Amount of Sunlight Your Roof Gets

The amount of sunlight your roof receives is another way to decide if your home is a suitable candidate for solar panels. To determine this, use Google’s Project Sunroof. Using this tool, you’ll find out how much usable sunlight per year your house can receive as well as how many square feet are available for solar panels. The tool will also show you the potential solar capacity and savings for your home.

After checking the estimated amount of sunlight your roof gets, you can also meet with a solar panel expert who will inspect your home’s orientation, roof angle, and tree shading. This will give you a more accurate determination of whether your roof receives enough sunlight to power your entire home.

Even if your home gets a lot of shading, your home could still be a good candidate for solar panels. Just keep in mind that you may have to use other technologies like microinverters and DC optimizers, which could make for a more expensive installation.

5. Your Local Climate

According to World Population Review, the sunniest states in America are Arizona, New Mexico, Texas, Nevada, California, Colorado, Oklahoma, Kansas, Utah, and Florida. So, if you live in any of these locations, you’ll likely see high energy production.

Yet, the sun’s rays are powerful enough to generate energy in all types of climates, from rainy areas to extremely hot locations. If you choose high-efficiency solar panels, you’ll enjoy the fact that they convert both direct and indirect sunlight into electricity. This means they can work on even the cloudiest days.

So, will the weather in your area affect your solar panels’ production? In some ways, yes. The sunnier it is outside, the more energy your solar panels will produce. But if you live in an area where it’s often rainy and cloudy, this doesn’t mean solar panels won’t work well for your home. It just means your panels’ won’t be as efficient or consistent, but they’ll still produce energy nonetheless.

Conclusion

Whether you want to reduce your energy costs, help preserve the environment, or both, going solar can be a great option. But before making the switch, there are many things to consider, such as the amount of your current energy bill, the type and condition of your roof, how much sunlight your home gets, and the climate you live in.

By considering each of these variables, you should be able to decide whether solar energy is right for your home. But no matter how good of a candidate your home is for solar, in order to get the energy savings you want, there may be some sacrifices you’ll have to make along the way.

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Real Estate

Most Popular Smart Home Devices

It’s estimated that smart devices are in at least 37% of all homes in the United States. Thanks to advancing technology and the internet of things (IoT), devices are able to connect to the internet and complete different tasks we never thought possible.

From smart speakers that tell you the weather and robot vacuums that can detect dirt and clean floors automatically to home appliances and air conditioning systems you can manage from your phone, smart homes are becoming more and more possible thanks to cutting-edge products from smart home companies like Honeywell, Samsung, Sony, and Siemens.

As demand increases for smart home devices and home automation systems, so too does the number of choices that are available on the smart home market today.

With all this in mind, let’s look at some of the best smart home solutions and how they can significantly transform the functionality of your home.

Smart Home Security Systems

Home security has always been an important concern for Americans. Security cameras, motion detectors, and other security devices can alert homeowners of any suspicious activity and keep intruders out.

But smart home security systems take things a step further. Below are smart home security products that can give you peace of mind.

DIY Home Security with SimpliSafe

SimpliSafe offers a budget-friendly DIY home security system. Yet, the relatively low price point doesn’t sacrifice the features of this dynamic system.

For example, what’s unique about this product is that you can personalize it to your needs. You’ll get the customary Base Station and Keypad, and add on additional features, including:

  • Entry sensor
  • Motion sensor
  • Indoor camera
  • Glassbreak sensor
  • Panic button
  • Smoke detector
  • Carbon monoxide detector
  • Temperature sensor
  • Water sensor
ADT Command

ADT Command has all the bells and whistles of a robust smart home security system, plus more. While it’s not the cheapest system on the market, this product allows you to monitor your home all from one device. The home security touchpad comes with 24/7 video monitoring. allowing you to keep an eye on your system.

Key features:

  • Works with Amazon Alexa and Google Assistant
  • Comes with three cameras
  • Home automation integrations
  • ADT mobile app
Vivint

The Vivint Smart Home Security System allows you to cover every aspect of smart home security, from video doorbells and security cameras to smart locks and garage door openers. Before equipment installation, Vivint’s technicians will come out and give you a free in-home consultation.

Key features:

  • Mobile app
  • Smart Hub with live camera feeds and remote access
  • Smart home customization

Smart Home Displays & Home Assistants

Smart home displays and home assistants are great for managing your smart home via voice controls. From displaying useful information throughout the day — like weather, upcoming appointments, and your grocery list — to playing music or video, smart home displays offer a range of hands-free voice assistant features.

If you’re interested in these products, the ecosystem includes quite a few smart home assistants to explore.

Amazon Echo Show 8

Featuring a bright 8-inch touch display, powerful speakers, and a built-in camera, the Amazon Echo Show 8 lets you view recipes, video tutorials, upcoming calendar appointments, and more.

Key features:

  • 13-megapixel camera
  • Security camera feeds
  • Video calling capabilities

Google Nest Hub

The Google Nest Hub is a consumer electronics product that markets itself as the “center of your helpful home.” From being able to catch up on Netflix shows to helping you wind down and wake up, the Nest Hub can truly transform the functionality of your home.

Key features:

  • Integration with compatible smart home technology
  • Hands-free operation
  • Music on-demand
  • Sleep tracking

Other best smart displays

  • Facebook Portal
  • Amazon Echo Show 15
  • Lenovo Smart Clock

Smart speakers

Smart speakers have been around for a while and are still popular devices people love to use around the home. Let’s look at some of the best speakers to consider adding to your smart home system.

For Google Assistant users

Nest Audio

The Nest Audio integrates with Google Assistant and delivers clear, detailed sound in an attractive design and makes a fine addition to your smart home hub.

Echo One

The second-generation Sonos One is a compact smart speaker with Google Assistant functionality. This speaker has powerful sound despite its small size.

For Alexa voice assistant users

Echo Studio

The Amazon Echo Studio is more than just a speaker. Aside from integrating with Alexa Voice Assistant and being voice-operated, the Echo Studio also features a built-in Zigbee home automation hub, allowing you to control multiple devices.

If you’re looking for something that’s a bit simpler, the Echo Dot could be a good choice.

Smart home care products

There are plenty of smart home care products out there that can help automate home control and maintenance, saving you lots of time and energy.

Roomba Robot Vacuum

The Roomba Robot Vaccum is a robotic vacuum cleaner that does all the heavy lifting for you so you can handle other cleaning chores.  This vacuum features built-in sensors that allow it to detect dirty floors and prevent it from bumping into walls and furniture. It was also designed with energy efficiency in mind and requires little juice to do its job.

Smart air purifiers

Smart air purifiers are great for homeowners who want to keep a close eye on their indoor air quality. These smart devices can connect to WiFi and Bluetooth and integrate with a mobile app, giving you plenty of control.

Top picks include:

  • Dyson Purifier Cool TP07
  • Aura Air
  • Coway Airmega 250S Air Purifier

Best pet cameras

With smart pet cameras, you never have to worry about leaving your furbaby home alone again. With remote monitoring, you can keep an eye on your furry friend with a mobile app, making this an ideal smart gadget for pet lovers.

There are plenty of smart pet cameras to choose from, including:

  • Furbo Dog Camera
  • Petcube Bites 2 Lite
  • Eufy Indoor Cam 2K Pan & Tilt P24
  • Wyze Cam V3

Smart home efficiency products

If you want to reduce your energy costs, consider smart home efficiency products like smart thermostats, smart lighting systems, and smart plugs.

Smart thermostats

Smart Thermostats — like the Nest Learning Thermostat and Ecobee — automatically adjust heating and cooling temperature settings in your home for optimal performance. These little devices are highly effective in delivering energy savings.

Best smart bulbs

Smart light bulbs are LED light bulbs that you can control using a smartphone, tablet, or smart home automation system. Some smart light bulbs allow you to manage your lighting preferences with simple voice commands and remote controls.

Popular choices include:

  • Wyze Bulb Color
  • Sengled Smart Wi-Fi LED Multicolor
  • Yeelight Smart LED Bulb (Color)
  • Philips Hue

Best smart plugs

A smart plug allows you to turn almost any wireless appliance with an on-and-off switch into an automated one. That way, you can turn those appliances on and off with a simple tap on your phone or voice command.

Below are some of the best smart plugs:

  • TP-Link Kasa Smart Wi-Fi Power Strip HS300
  • TP-Link Kasa Smart Wi-Fi Plug Mini EP10
  • ConnectSense Smart Outlet 2

Last words

The modern home has evolved into a space that’s more connected than ever. With internet connectivity capabilities, inanimate objects powered by artificial intelligence can bring a level of functionality to the home like never before.

Craving more information about what you can do to automate your home? Sign up for more homeowner tips and enter to win a free Home Depot gift card.

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1st Time Homebuyer Guides Real Estate

The Definitive First-Time Homebuyers Guide

How to close on your first property and accelerate your journey to financial freedom

So, you’re thinking about buying a home for the first time. That’s great news! From increased financial security and tax benefits to having a permanent roof over your head and being part of a local community, there’s a lot to like about becoming a homeowner.

If you’re looking to achieve long-term financial independence, a home purchase is one of the smartest investments you can make. According to a recent study from the Federal Reserve, U.S. homeowners have a median net worth of $255,000. Renters, on the other hand, have a median net worth of just $6,300 — a difference of 40x!

While the benefits of being a homeowner speak for themselves, the process of buying your first home isn’t exactly a walk in the park. Truth be told, the experience can be downright crazy and filled with emotional ups and downs.

To make your journey easier, we’ve put together this comprehensive guide that outlines everything you need to know about becoming a first-time homebuyer, including:

  • How to think about financing your first home
  • The pros and cons of working with a real estate agent
  • What to look for in a property
  • Tips on negotiating a deal
  • What to expect after an offer is accepted
  • Hidden homeowner costs to consider
  • Unforeseen challenges you might encounter
  • First-time homebuyer mistakes to avoid
  • Additional resources that can help you throughout the process

Buying your first home: The home loan financial component

There are two main types of loan programs available when it comes to mortgages, and you’ll want to determine your eligibility. First, conventional loans are the most common type of loan, and are not backed by the government. Then there are non-conventional loans which are backed by the government. Much more details on the differences between the two a bit later on.

Whether you’re buying a house for $2 million or $400,000, you should aim to have at least 20% of the purchase price upfront for a down payment. The remaining balance of the home price is the loan amount you are requesting. Having at least that 20% up front will enable you to avoid paying for private mortgage insurance (PMI), which most mortgage lenders require when buyers put down less than 20%.

While it’s possible to procure a home with as little as 3% down payment via the 97% loan-to-value mortgage program or 3.5% down payment by taking out a loan from the Federal Housing Authority (FHA), doing so is unadvisable, since PMI can cost as much as 2.5% of your total mortgage.

Of course, it never hurts to put down more than 20% if you have the money. The more money you put down, the lower your monthly loan payments will be.

For example, if you put down 20% on a $500,000 house and obtain a 30-year fixed mortgage at 4%, your monthly payment would be $1,910 (excluding property taxes and insurance). If you buy that same house with the same mortgage rate but only put down 10%, the payment increases to $2,148 per month (again, excluding property taxes and insurance). Plus, you’ll also be on the hook for PMI!

If you were to put down 30% in this same situation, however, your monthly payment would decrease to $1,671. You get the gist.

Tips for saving for a down payment on your first home

Saving up for a down payment can be a massive undertaking for first-time homebuyers. Here are some tips to make the process easier.

Set a goal

First things first: Know your price range. You need to figure out how much you need to save up to begin with. Again, the smart play is to have enough cash that you can put 20% down towards your home loan, while still being able to afford closing costs and living costs after that. Study your finances, create a budget, determine what your ultimate goal is, and develop a plan that helps you get there.

Cut unnecessary spending

Once you’ve figured out how much you need to save, it’s time to trim the fat off your budget. Do you really need subscriptions to Hulu, Netflix, and AppleTV? Or might you be able to get rid of one of them? Instead of going out for dinner, you might want to plan on cooking more meals at home. And instead of splurging on new clothes, maybe you can ride your wardrobe for another year. Wherever you can cut unnecessary spending, strongly consider doing so.

Optimize your savings

If your money is going to be parked away in an account while you save for a house, you might as well get the biggest return on it. Rather than putting your money in a regular savings account that generates paltry interest, consider a high-yield savings account (HYSA) instead where you’ll earn a lot more.

Set up automatic deposits

Planning to save for a down payment is one thing. Actually doing it is quite another. If you’re serious about saving for a down payment for your first house, consider creating a new bank account (or HYSA account!) and automatically routing something like 5% or 10% of each paycheck there. That way, you get the peace of mind that comes with knowing you’re building up your down payment without having to manually move money.

Pocket any windfalls

Win the lottery? Inherit some money? Win your fantasy football league? Get a huge bonus at work? Any money you receive from windfalls like these should automatically be routed to the account you’re stockpiling your down payment in.

Popular mortgage options for first-time homebuyers

Assuming you don’t have enough money to buy your first home with cash, you’re going to need to secure a mortgage. As you begin exploring your options, you will likely come across a number of government-backed loans, including VA loans, which help active duty military and veterans secure properties; and USDA loans, which help buyers in more rural areas. If you’re like most first-time homebuyers, however, you will probably seek financing in one of two ways: securing an FHA loan or choosing a conventional mortgage.

Whichever route you decide, you then have to choose loan terms, which are generally 15, 20, or 30 years, with 30-year mortgages being the most popular option.

Federal Housing Administration (FHA) loans

If you’re a first-time homebuyer who has a debt-to-income ratio of 50% or less and a credit score of at least 580, you may be able to afford a home by putting down just 3.5%; if you’re able to put down 10%, your credit score can be as low as 500. For cash-strapped borrowers and folks with suboptimal credit scores, FHA loans are much easier to secure and can provide a path toward homeownership.

But if you go this route, you’ll have to pay PMI. Plus, the FHA won’t let you borrow a large amount of money, which could cause you to miss out on pricey properties you really like. And in today’s hyper-competitive housing market, sellers may be less receptive to the idea of working with someone who’s financing the deal with 96.5% debt compared to someone who’s putting down 50% cash.

Conventional mortgages

If you find yourself on solid financial ground, a conventional mortgage may be a better option — particularly if you’re able to put 20% down and have a credit score that is higher than 740, which puts you in a position to get the best terms possible. This is something that simply can’t be overlooked in our era of rising interest rates.

Of course, meeting this high bar is a challenge, and you may still qualify for a conventional mortgage as long as your credit score is at least 620 and you can put down at least 10%.

What is the difference between a fixed and variable rate mortgage?

In addition to choosing the lender you’re going to work with, you’ll also need to choose what type of mortgage you want. For most buyers, this will mean choosing between a fixed rate or variable rate mortgage.

What is a fixed-rate mortgage?

A fixed-rate mortgage is a mortgage that has the same interest rate throughout the life of the loan. For example, if you lock in at 4% for 30 years, your interest rate will be the same until you ultimately pay off your mortgage three decades from now (or sooner!). Though interest is front-loaded on these loans and the amount you pay toward principal and interest varies month to month, total payment remains the same. Due to the predictable nature of these loans, many first-time homebuyers prefer them.

What is a variable-rate mortgage?

A variable-rate mortgage, also known as an adjustable-rate mortgage (ARM), is a mortgage with interest rates that are fixed for the first few years but change over time based on how specific benchmarks like the LIBOR index perform over time. In many cases, lenders entice borrowers by offering ARMs at lower rates than fixed mortgages for a specific period of time. Once that period ends, however, rates could move higher or lower depending on the market.

Popular examples of ARM mortgages include 2/28, where the borrower has a fixed rate for the first two years and then a floating rate for the remaining 28 years, and 5/1, where the borrower has a fixed rate for five years and a rate that resets every year thereafter.

As interest rates continue to rise, more and more borrowers are rolling the dice on ARMs. If you’re planning on living at a property for just a couple of years — and can stomach increased interest rates if your plans fall through — a 5/1 ARM could be a good option; maybe you’ll be out in three years. On the other hand, if you’re looking for a home you plan to live in for many years, you may want to go with a fixed mortgage instead.

How can I get the best mortgage rate possible?

To get the best mortgage rate, you need to be able to put down at least 20% on your home, have a low debt-to-income ratio, and have a strong record of employment or success as a small business owner. On top of that, you need to have a solid credit score. Typically, the most favorable mortgages are given to buyers who have a credit score of at least 740.

Credit scores explained

Your credit score is a fluid measure that represents your creditworthiness, i.e., how likely you are to repay your debts. This score is determined by five categories:1. Payment history (35% of your score), which represents how likely you are to repay debts on time.

2. Amount owed (30%), also known as credit card utilization rate, which reflects how much of your credit is currently in use; if you have a $20,000 credit line and have spent $2,000 against it, your utilization rate is 10%. Best practices suggest keeping your utilization rate as low as you can; below 10% but higher than 0% is ideal.

3. Credit history (15%), which measures the average age of all your credit accounts. The longer your credit history, the better (keep your oldest accounts open!).

4. Credit mix (10%), which represents the different types of credit accounts you have. Most first-time homebuyers might have a mix of credit cards, student loans, and auto loans, for example.

5. Credit inquiries (10%), which reflects how often you’ve opened a new credit line in recent years. When you open a new credit card, for example, the issuer conducts a hard inquiry on your credit, which stays there for two years. Mortgage lenders might raise an eyebrow if they see you’ve applied for several new credit accounts in a short period of time, which will adversely impact your credit score.

How to increase your credit score

No matter what it looks like right now, the good news is that you can take proactive steps to improve your credit score over time. Here are some tips to keep in mind that can help you bring your score to where it needs to be when you buy your first house.

Pay off credit cards on time and don’t carry a balance

Together, your payment history and credit card utilization rate make up nearly two-thirds of your credit score. By paying your debts on time and in full, you can improve your credit score steadily over time. Whatever you do, never make the minimum payment when you’re in the market for your first home. If you can’t afford to pay your credit card bills, it’s probably not the best time to buy a house.

Stop applying for new credit (except your mortgage!)

Since hard inquiries have an adverse impact on your credit score, don’t apply for new credit unless you absolutely have to.

Keep older credit cards open

Oftentimes, people close out old credit cards they never use for convenience. Resist the temptation. If you want to improve your credit score, your oldest credit cards are your friend. Keep them open, even if you just use them to buy a can of soda once a year.

What is the mortgage process like?

In today’s competitive housing market, homebuyers need to be ready to pounce on a property the moment they make up their minds. The easiest way to do that is by getting pre-approved for a mortgage instead of trying to secure financing at the last minute.

As you begin the pre-approval process, you first need to determine how much money you can afford to spend on your house and what type of mortgage makes the most sense for your unique circumstances. Once you’ve done that, get ready to collect a lot of documentation and send it over to your broker. This includes W2 forms, 1099s, profit and loss statements (if you own a small business), bank statements, investment account statements, what your cash outflows are, and how much debt you have, among other things. During this stage, the broker will also look at your credit reports to determine your creditworthiness. By securing a mortgage pre-approval, you demonstrate that you’re a serious buyer who’s ready to make a deal.

After you’ve been pre-approved and have had an offer accepted, it’s time to put down what’s called “earnest money,” which is typically 1% or 2% of the purchase price — a token that you are legitimately interested in buying the home. Once the earnest money has changed hands, your deal is pending, and it’s time to secure your actual mortgage — and also run a title search, conduct an inspection, and get the house appraised.

At this point, you should certainly talk with the lender that pre-approved you. But you should also check in with one or two other brokers to see if you can get a better deal.

If you buy a home for $500,000, put 20% down, and secure a 30-year fixed mortgage at 4%, you will pay $687,478 over the life of your loan (plus insurance and property tax). That same deal with a 3.75% interest rate lowers your total payment to $666,886 — a savings of more than $20,000 over the life of the loan.

In other words, when it comes to mortgage rates, every decimal counts.

After approaching a few lenders and passing over your information, you will receive loan estimates, which you can then compare to figure out which lender is giving you the best deal. During this process, you may be on the hook for credit report fees, which hover somewhere near $30 per lender. Unfortunately, loan estimates don’t last forever. If you don’t act quickly, your lender may have to adjust the terms as market conditions change. To avoid that, consider securing a rate lock, which gives you the peace of mind that comes with knowing your interest rate won’t change over a determined period of time — 30, 45, or 60 days, and even longer.

Once you’ve figured out which lender you want to work with, the underwriting process begins. Generally, underwriters will require borrowers to conduct an appraisal to ensure the home is worth enough to justify the size of the mortgage loan. (Of course, you’ll be responsible for the appraisal fee; that’s another $300 to $800, depending where you’re buying.)

Hopefully the odds are on your side, and the underwriters agree to approve your mortgage. Should that happen, your interest rate will be locked in from that point forward, and you’ll be that much closer to landing the home of your dreams.

Don’t forget about tax credits

As a first-time homebuyer, you may qualify for a tax credit when you close on a new home. In 2008, for example, first-time homebuyers who took the credit received a tax refund of up to $7,500. In 2021, members of Congress introduced the First-Time Homebuyer Act of 2021, which would revive a similar tax credit. At the time of this writing, that bill still hasn’t become law. This is all just to say that first-time homebuyers need to keep their eyes peeled for potential tax credits from both their state and federal governments.

Closing costs: The first-time homebuyer’s often-overlooked financial enemy

You’ve made an offer, it’s been accepted, and now you’re finally ready to close on the property. Get ready to be hit by a deluge of additional closing costs you might not even be aware exist, including:

  • Loan application fees, which some lenders charge to handle your mortgage application.
  • Attorney fees, which lawyers charge to create contracts and analyze transaction-related documentation.
  • Closing fees, which are paid to the entity that facilitates the closing (e.g., a title company or an attorney).
  • Courier fees, which can be levied if the deal is being done with paper documents.
  • Escrow deposits, including prepaying property taxes, which are often required.
  • Homeowners insurance, which generally needs to be paid up front for the first year.
  • Mortgage broker fees, which can range from 0.5% to 2.75% of the home’s purchase price.
  • Title insurance, which protects buyers in the event a previously undiscovered lien or ownership dispute arises.
  • Origination fees, which cover the lender’s administrative costs and can hover near 1% of your mortgage.
  • Real estate commissions, which can be as high as 6% of the final sale price; luckily, the seller is on the hook for these costs (though they often factor into the sale price).
  • Recording fees, which hover near $125 and may be charged by a town clerk’s office to process the public land records.
  • Title search fees, which range between $200 and $400 and cover the costs associated with ensuring no liens or disputes impact the property you’re buying.

Depending on your unique situation, you might get hit with even more fees than this (e.g., private mortgage insurance)! Very broadly, closing costs range between 2% and 5% of your mortgage. So, if you’re taking out a $500,000 loan, you might be on the hook for an additional $25,000 in closing costs.

This is all to say that, just when you think you’ve wrapped your head around how much your first house will cost, more fees will almost certainly come your way. Be ready.

Right now, I can’t get a mortgage. Am I out of luck?

When your mortgage application is rejected, it’s easy to feel dejected. But all hope isn’t lost. Maybe now just isn’t the right time for you, and that’s perfectly okay. In actuality, being unable to get a mortgage can be a blessing in disguise, particularly if interest rates plummet by the time you’re ultimately ready to afford your first home.

If you’re unable to get a mortgage, it could be because you have a poor credit score or haven’t saved up enough for a down payment. If that’s the case, it might be time to start working on stockpiling money away and improving your credit score (or hiring a company to help you do the same; but that’ll hurt your saving-up-for-a-down-payment plan). While you’re at it, you may want to look into debt consolidation services that can help you refinance your debt and pay it off faster.

Additionally, you also might want to take a look at rent-to-own programs, which give you a path to home ownership even if you can’t get a mortgage right now. Under these initiatives, you can rent a property as a tenant and have the option to buy it when your lease ends. This can be a great way to determine if you actually like living somewhere before making one of the biggest decisions of your life. For those with less-than-optimal credit, this is also a great way to help get your credit back on track while pursuing homeownership at the same time.

Real estate agents: Pros and cons

According to the National Association of Realtors®, 87% of recent homebuyers enlisted the services of a real estate agent or broker during their latest transaction. But not every first-time homebuyer needs to hire an agent. With that in mind, let’s examine some of the top advantages of working with a realtor — and some of the reasons you might prefer to go it on your own.

Advantages of working with a realtor

Faster process

By now, you should have an idea of how complicated the home-buying process is. When you work with an agent, you get to leverage the experience of someone who lives and breathes the process day in and day out. Not only does this help you make a better purchasing decision, it also saves a considerable amount of time.

Market knowledge

In today’s booming real estate market, how can you tell that a property is priced properly? The right real estate agent will know the local market inside and out and can help you identify reasonably priced properties and those that are way above-market. This information can help you avoid making a deal you ultimately regret.

Negotiation skills

Are you ready to negotiate with another real estate agent? Because if you don’t hire an agent of your own, that’s what you’re going to need to do. By joining forces with the right agent, they will negotiate the deal on your behalf. This can help you get a better price or get the seller to include more items in the deal — like that nifty wine fridge or the area rug that really ties the room together.

Networking

Hire an agent, and chances are they will know the agent on the other side of the deal. These personal connections can help deals close smoother. Plus, agents can recommend all sorts of folks you might need to hire during the process — like home inspectors, well inspectors, septic tank companies, real estate attorneys, and more.

Disadvantages of working with a realtor

Commission

One of the biggest downsides of hiring a realtor is paying their commission. Generally speaking, realtors get between 5% and 6% of the deal as a commission, which is split evenly between the buying and selling agent (or pocketed by one agent if they’re working both sides of the deal).

If you go through the process on your own, half of that commission is wiped off the books — or all of it, if you’re buying a for-sale-by-owner (FSBO) property. So, choosing not to hire an agent could help you save a good chunk of money.

Intermediary

When you work with an agent, they communicate on your behalf to the agent representing the seller (or the sellers themselves, in a FSBO scenario). As a result, you’re incapable of directly communicating with the people on the other side of the deal. This could slow the process down considerably. It can also cause a lot of stress as you anxiously wait for an update.

Multiple clients

Unfortunately, when you hire a realtor, you’re not their only client. As such, you might have to get used to waiting. In some circumstances, you might even miss out on a deal because your agent is focused on helping someone else. Who knows? Your agent might even represent a different client in a deal you were interested in. That’s just the way it is.

Misalignment

Not every real estate agent is the same. Unfortunately, some homebuyers learn this lesson the hard way. According to the National Association of Realtors, 73% of buyers only interview one agent before hiring them. If you end up with the wrong agent, they may end up leading you down a path where you end up with a bad deal (e.g., because they care more about their commission than helping you find your dream home).

You can avoid this issue by interviewing a couple agents before deciding who to go with. Keep in mind that, once you sign an exclusivity contract with a realtor, you are bound to only use that agent until you formally cancel the contract. If you enlist another agent before doing so, you may end up in legal jeopardy. Keep in mind you can (and should) try to negotiate down the length of these contracts just in case you aren’t happy with your agent’s representation.

Are you interested in getting free advice from expert real estate agents while earning rewards as you explore buying your first property? HomeApproach has you covered.

What to think about when buying your first home

When you’re buying your first home, you’re obviously going to be interested in the house itself, the property, and what other amenities might exist in the deal (e.g., an in-ground swimming pool or an outdoor sauna). Beyond that, here are some other considerations to keep in mind:

  • Neighborhood. You’re buying more than just a house and the property itself. You’re also buying the neighborhood. Is your ideal home within walking distance of restaurants and bars? Or would you prefer to live near open space so you can hike and enjoy the outdoors? Spend some time studying the neighborhood and make sure it’s somewhere you can imagine living. Also, as a general rule, avoid buying the most expensive house in the neighborhood; it could hurt you down the road.
  • Schools. If you have kids or are planning to, you’ll definitely want to do some research on the local school district to make sure you’re happy with the caliber of education. Even if you don’t have kids, education is highly correlated with property values. According to the National Bureau of Economic Research, property values increase $20 per every $1 spent on education. That being the case, you might want to buy your first home in a community that invests in education.
  • Property taxes. Before you sign any contract, you need to wrap your mind around local property taxes and get a sense of how your potential new town’s taxes have changed over time. In addition to taxes on your home, you may also be on the hook for taxes on motor vehicles and boats you own.
  • Location. Are you happy living out in the sticks or would you prefer living closer to public transportation? Does the local pizza place deliver to the address you’re considering? Is your property close enough to the highway? Only you know the answer to these questions.
  • Town politics. If you’re moving to a new area, spend some time researching the town’s politics and finances. The last thing you want is to move to an area undergoing local scandals or involved in high-ticketed lawsuits that may impact your property taxes moving forward.
  • Starter home. You’re buying your first home. Do you plan on living there for as long as possible? Or might you want to flip your house in a couple years and move into your forever home from there? If you’re buying a starter home, don’t sweat it: You can defer capital gains when you buy your next home by using a 1031 exchange.

My offer was accepted! That means the process is done, right?

Not at all. Once your initial offer is accepted, the fun is just beginning

At this point in the process, you hire a home inspector who will thoroughly examine the property to determine the condition of the nuts and bolts, including the HVAC system, furnace, structural components, electrical systems, plumbing, roof, and chimney, among other things. Inspections cost anywhere between $300 and $1,000 on average, depending where the property is located (hey, look, another hidden cost!).

Once you’ve got the home inspector’s report, it’s time to go back to the seller and ask for additional concessions — or keep the deal as-is, if you don’t mind what the report surfaces.

Keep in mind that the inspector may find something that is a dealbreaker (e.g., the house requires a brand-new foundation and septic tank). Should this happen, you still need to pay the inspector — and, if you continue house hunting, you’ll need to pay the next inspector, too.

Real estate negotiation tips for homebuyers

In most cases, you’re probably best off letting a real estate agent negotiate on your behalf. But if you decide to go it alone, here are a few tips to keep in mind:

  • We’re currently in a seller’s market, so be ready to spend top dollar to close a deal.
  • Even so, you may be able to get a better deal by getting a little creative. For example, using an odd number can make your offer stand out (e.g., $450,000 vs. $451,199), forcing the would-be seller to spend more time thinking about your proposal.
  • Remember, there are two rounds of negotiating: before the initial offer is accepted and after the inspection happens. Once you get a seller to accept the original offer, they’ll become emotionally invested in the deal. If a lot of items come up during the inspection, you may be able to get some significant concessions.
  • Real estate negotiation isn’t just about dollars and cents. You can also ask the seller to add physical items to the deal — like gym equipment, a hot tub, or furniture.

Additional hidden homeowner costs to consider

Suffice it to say that being a homeowner is not an inexpensive endeavor. Here are some other hidden costs to consider:

  • Additional taxes. Your new town or city might levy taxes besides property taxes, like fire district taxes. Make sure you understand the totality of your potential transaction’s tax implications.
  • Homeowners insurance. You’ll need to carry homeowners insurance as long as you have a mortgage. On average, a policy with $250,000 in coverage will set you back $1,383 each year.
  • Utility bills. If you’re moving into a larger space, think about how your utility costs might change. As a best practice, make sure to ask the seller for the previous year’s worth of utility bills (e.g., heating oil, electricity, and water). That way, you can wrap your mind around your future costs.
  • Inevitable repairs. Ask any homeowner and they’ll tell you the same thing: It’s only a matter of time before something major goes wrong at your home. Maybe the AC, furnace, or water treatment system fails, for example. As a new homeowner, you’ll have to cover these costs out of pocket; there’s no landlord to help. To protect against this, you might want to consider a home warranty that will help offset costs and cover gaps in homeowners insurance.
  • Moving costs. Unless you’re planning on hauling all of your belongings from your old place to your new one in your sedan, you’re either going to need to rent a U-Haul or hire professional movers to get you settled in. According to one recent report, movers cost anywhere between $800 and $5,700 depending on how long your move is. Add it to the tab!
  • Time off of work. This might be the most hidden cost of them all. You can’t work when you’re moving. If you’re an employee, that means you’ll need to take vacation days off during the move. If you’re self-employed or a 1099 contractor, you’ll likely have to take several days and miss out on generating income.

Unforeseen challenges for first-time homebuyers

Since it’s your first time through the homebuying process, it’s easy to be blindsided by situations you would never expect to encounter. But over the years, first-time homebuyers across the country have seen it all. Here are some of the unforeseen challenges you might encounter along the way.

Falling in love with a property too soon

First-time homebuyers have a tendency to fall in love with a home way too early. You might see a house you think is awesome, decide to make an offer right then and there, and start thinking about your new life and how you’re going to set up your new space. All of a sudden, your agent calls you to tell you the seller accepted another offer. Just like that, your dream evaporates. Avoid dealing with this emotional rollercoaster by only truly falling in love with a property once you’re living in it.

The seller backs out unexpectedly

Your offer has been accepted, you’ve passed the inspection, and your closing date is getting closer and closer. Then the seller has a change of heart and decides to pull out of the deal, and you’re back to square one. A scenario like this isn’t out of the realm of possibility, so be prepared for it.

Something comes up during the home inspection

One of the most common ways deals fall apart occurs when the home inspection reveals some major problems. You might fall in love with a house only to learn it has a rotten roof, mold in the basement, and a structurally unsound chimney. In some instances, you may be able to work through these serious issues with the seller. In many cases, however, major issues are a dealbreaker because sellers don’t want to budge.

Something comes up after the home inspection

Just because you’ve made it past the inspection doesn’t mean your deal is done. For example, your lawyer may uncover serious issues when doing their due diligence — like a seller who’s trying to hide the fact the property used to have an underground oil tank that leaked and caused environmental damage that needs to be mitigated. Upon learning this information, the attorney would likely recommend you pull out of the deal. How could you not take their advice?

Something crazy happens outside your control

If we’ve learned anything over the last two years, it’s that the world can change drastically overnight. A completely unpredictable event — like the pandemic — can always throw a wrench into your plans. If dividend income represents the lion’s share of your salary, a lender might decide to deny your mortgage application when the market takes a significant turn for the worse. Just remember anything can happen at any time, and there might not be anything you can do about it.

First-time homebuyer mistakes to avoid

Since they’ve never navigated the process before, it comes as no surprise that first-time homebuyers make mistakes. Learn about these common mistakes so you don’t suffer the same fate.

Finding a house before securing a mortgage

Without a mortgage pre-approval letter, it’s impossible to act as fast as possible on a deal. In today’s incredibly competitive real estate market, failing to secure financing before shopping for homes probably means you won’t be first to act — which could cause you to miss out on your dream property.

Not shopping mortgage brokers

Since it’s convenient, many first-time homebuyers choose to do business with the first broker they talk to. But by shopping brokers, you may be able to get a better rate. Over the life of a 30-year loan, a fraction of a percent can really make a huge difference. Be sure to engage at least a couple of brokers before signing a contract with a lender.

Not doing an inspection

There’s a tendency among first-time homebuyers to willingly bypass a home inspection. They’ve fallen in love with the property and think it looks in good enough shape to their untrained eye. A few months after the deal is done, they learn the hard way why inspections are necessary when they need to replace their central air system. While inspections can be pricey, they are always necessary. Skip an inspection at your own risk.

Spending more than you should

Saving up for a down payment and closing costs is one thing. Being able to live comfortably on the other side of your first real estate transaction is quite another. Be smart about your finances, and don’t take on a bigger property than you can truly afford. Always be sure to calculate what your monthly mortgage payment would be to determine your affordability. Here is a free online mortgage calculator you can use to help easily figure it out.

Furthermore, be sure to research what assistance programs might be available to you. First time home buyers can often apply for down payment assistance on the local level through state or city programs. Usually the U.S. Department of Housing and Urban Development (HUD) website is a good place to start (link below in resource section). Grants or no-interest loans are two examples of offerings which may be available to help with down payments and closing costs.

Making decisions based on emotion

It’s all but impossible to go through a real estate transaction without emotion. Unfortunately, many first-time homebuyers let emotion guide their decision-making. This is one area where working with a trusted real estate agent can make a big difference. The right agent can walk you through the process and speak to you through an experienced, knowledgeable, and objective lens.

Additional resources for first-time homebuyers

Since you’ve made it this far, you’re no doubt interested in learning as much as you can about buying your first home. Here are some additional resources you may want to check out:USA.gov | Help Buying a New HomeChase.com | The 28% (Monthly Income) Rule
Bankrate | 5 First-time Homebuyer Loans and Programs
Nerdwallet | First-Time Home Buyer Programs by State
Freddie Mac | Three Pro Tips for First-Time Homebuyers
U.S. Department of Housing and Urban Development (HUD) Housing Assistance

Get advice from a real estate expert today!

At Home Approach, we’re all about helping people like you find free advice from experts on how to navigate the first-time home buying process. While this might be your first time through the process, our experts have helped countless people like you end up in the home of their dreams.

Book an appointment with a qualified mortgage lender today to accelerate your path to homeownership. You may qualify for up to $1,000* or more on a home purchase.

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10 tips for how to save for a house

Nothing defines the achievement of the American Dream more than purchasing a home and achieving homeownership. The real estate market can be pretty cutthroat, so you need to be “in it to win it” from the start of the process.

This major life milestone is likely the largest investment you’ll ever make in your lifetime. And, with the right approach, the rewards will certainly be worth it for first-time homebuyers.

Buying a house, however, requires a significant sum of money, as well as a strong handle on your personal finances. Not only do you need enough money to cover a down payment and closing costs, but also the monthly payment and extra added costs that will come once you move in — like utility bills, garbage pickup, and landscaping — you’ll likely be on the hook for property taxes, too.

The good news is that saving to buy a home is an attainable goal. It just requires a little bit of strategic planning and some savvy financial decisions. Although it might take time to save a substantial amount of money, these 10 tactics can accelerate the process — bringing you that much closer to owning your dream home.

1. Know what you want from the beginning

First, you’ll need to figure out exactly what you’re looking for in a home. How much house can you reasonably afford to pay? This determines your home loan. How many bedrooms do you need? How many bathrooms? How big does the backyard have to be? Answering these questions will help you determine how much down payment savings you’ll require, which should be 20% of the home’s value at a minimum. Following mortgage rates closely and use a mortgage calculator to determine how much you’ll have to pay based on the mortgage lender’s rates.

2. Pay off any accumulated debt

Unpaid debt racks up significant interest over time, making it harder and harder to pay off. While a little debt may be beneficial, too much can hurt your credit score, decreasing your chances of receiving a loan or buying a home at all. If you’re saving to buy a home, decreasing your credit card debt — or, better yet, completely eliminating it — will ensure more of your paycheck is going towards your savings rather than your bills.

As you begin repaying debt, pay off high-interest debt (e.g., credit cards) first, and work your way down from there. Regularly monitor your credit report as you pay off your debt so you can monitor the progress you are making.

3. Eliminate unnecessary expenses

As a homeowner, do you really need a subscription to every streaming network? Do you really need to eat out for the second night in a row? Saving for your first home often requires making a few lifestyle and financial changes. Think about cutting down on excess expenses. You need to pay your bills and buy groceries, but you probably don’t need that new pair of Air Jordans. Reduce your cash outflows and put those savings toward the house of your dreams.

4. Pick up a side job or freelance work

One easy way to save for your first home is to pick up extra work gigs. Even if you’re working a full-time job, there are all kinds of jobs you can do on the side — like driving for Uber, bartending, and working in retail. Do you have a particular skill set you can exploit to make money? This is your time to shine. Whether you’re a graphic designer, a copywriter, or a software developer, you should be able to pick up a side hustle that pays decent money. As well as contributing to your savings, you can also use the extra income to start an emergency fund which could come in handy later on.

5. Stockpile your tax refund and bonuses

It may be tempting to immediately spend that tax refund, a well-deserved job bonus, or check you receive on your birthday on something nice and immediately rewarding. However, setting savings goals and that money aside brings you one step closer toward reaching your goal of buying your first home. Think of that money as a long-term investment — not a temporary short-term prize.

6. Rent a spare room

Do you have a spare room or an underutilized living space in your home? With the housing crisis in full effect, several people are turning to more affordable living options that include room rentals and accessory dwelling units (ADUs). If you have extra space in your current home — or you end up with an extra room in your new home —you can rent out a spare room extra cash. Once you’ve bought your first home, you can rent out extra space to help pay your mortgage, utilities, and taxes.

7. Utilize budget tracking apps

Managing money to save for your first house can take a lot of time and effort — especially when tracking every expenditure and account balance. Although using pen and paper still works, there are a number of purpose-built budgeting apps and digital tools that can save you a lot of time in the long run. Some of these apps connect to your bank account and help you categorize your expenses and stick to your budgeting goals. With the right budgeting app guiding the way forward, saving to buy a home doesn’t have to be a chore.

8. Look for better job opportunities

If you’re having a hard time saving for your first home, it might be time to look for a new job that pays more. Before you jump ship, you may want to ask your current company whether there are any opportunities for advancement. But since research suggests that job-hopping is the easiest way to boost your salary, it might be time to pursue a new venture. If this isn’t an option for you, consider asking your boss for a raise — especially if it’s been a while since you’ve had one.

9. Open a high-yield savings account (HYSA)

In recent years, new high-yield savings accounts have emerged, offering considerably higher interest rates than traditional money market accounts. These financial providers — like Ally, American Express, and Discover — are able to pay you more for their money because they don’t have any physical branches. While an HYSA won’t make you rich overnight, it will help you earn more for your money, without any risk. A simple Google search will reveal the best HYSAs to consider.

10. Reduce your retirement savings contribution

Since you’re buying your first home, chances are you’re not ready to call it a career anytime soon. To save money for a down payment, you may want to consider temporarily decreasing your monthly 401k contributions. If you decide to move in this direction, don’t make it a habit. Once you have enough extra money saved for your first home, boost your contributions. Preparing for retirement is almost as equally important as having the security of your own property.

Final thoughts

Despite how difficult saving for your first home may seem, it’s not impossible. By making changes to your spending habits and incorporating a few strategies, you can achieve your financial goal of becoming a first-time property owner.

Ready to start thinking more about buying your first home? Talk to one of our experts today — for free.

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Congratulations on Your New Home! What now?

Congrats and warm wishes on your first home! Just like that you, you are a real estate jedi and are crushing this whole adulting thing! You’ve found the perfect home for your beautiful family and are a homeowner in the making. It’s exciting to think ahead about moving in and starting your new life there as soon as possible. Happy memories are right around the corner! Your move and transition will be a whole lot easier if you spend some time planning it out, and consider some of the important aspects of setting up your new home. The end goal is to officially make it into “home sweet home”! Don’t forget to mail out a new home card greeting card and also to make plans for a housewarming party once you are ready to celebrate the occasion with your loved ones. Housewarming wishes and housewarming gifts go a long way towards making you feel right at home. So soak up all those housewarming cards and congratulations messages with love and joy right from the start!

All too often, new homeowners make the move into their new home for the first time, and then discover that they overlooked a ton of to-do items that need to be done in order to make the house livable and ultimately a happy new home. Unfortunately, this can lead to a lot of frustration — and a lot of wasted time and money.

To help you avoid that fate, here are a few things to keep in mind when embarking on this new adventure of setting up your home.

Do a walkthrough of your new home

Before you’ve moved all your belongings into your new home, do a walkthrough to make sure nothing is broken or missing. Here are a few questions to ask yourself during this process:

  • Are all the appliances in working order? Test out all the major appliances to make sure they’re working correctly. Make sure everything in the house is accounted for and in good shape.
  • Are the windows and doors functioning properly? Check the doors and windows to make sure they close and lock properly. You should also call a locksmith and get new locks.
  • Are all the lights working? Flip all the switches to make sure that the lights work. While you’re at it, make sure all the lightbulbs are the same.
  • Does the plumbing work correctly? Run the water in all the sinks and tubs to make sure there are no leaks. The last thing you want is water damage during your first few weeks at your new house.
  • Are the heating and air conditioning systems in good shape? Check to make sure that the temperature in your home is comfortable. Ideally, your home inspector should verify this before you make a deal since these systems don’t come cheap.
  • Check the smoke and carbon monoxide detectors. Push the test button on all of the smoke detectors to make sure they are working. You just spent a lot of money on the transaction, and you deserve the peace of mind that comes with knowing you’re safe.
  • Look for any safety hazards. Make sure there are no loose wires, nails, or other safety hazards in your new home. Getting injured in your new home isn’t anyone’s idea of a good time.
  • Take note of any damages. If there are any damages in the home, make a note of them so you can have them fixed. Welcome to homeownership!

As you can see, doing a house walkthrough when moving into a new home makes a heck of a lot of sense. By checking everything out, you can make sure that your home is in perfect condition and all your belongings are safe. If there are any problems or issues, you can address them right away, before the big move — before someone is hurt or your house gets damaged further.

House walkthroughs are especially important if you have small children or pets because it lets you rest comfortably knowing there isn’t anything dangerous in the home.

Create your new home to-do list

Having a to-do checklist is a great way to help you stay organized during the hard work of the moving process. You can start creating this list during your initial walkthrough. It will ensure that you don’t forget anything important that needs to be done before and after you move.

A to-do list will also help you prioritize what needs to be done and when. Ultimately, you won’t be able to take care of everything on your list at once, so it’s important to schedule things out over time.

Here are some things to consider including on your checklist:

  • Scheduling utilities to be turned on/off, including cable, internet/wifi, electricity, and heating oil, among other things
  • Packing and unpacking all belongings
  • Arranging for furniture to be moved
  • Changing your address with the post office
  • Hiring professional movers or procuring a rental truck
  • Planning out what furniture goes into which rooms

Of course, there are other important items to add to your checklist. Be sure to include anything that is specific to your move and needs.

Check your home’s security

If you’re moving into a new home, it’s important to assess the security of the property as soon as possible.

No matter how secure your new home is, there are always ways to improve it. For example, you can change the locks on all doors and windows, install a home security system, and add outdoor lighting. These are all great ways to deter burglars and keep your family safe. By taking these precautions, you can rest assured that your new home is safe and secure.

Set up your internet (and other utilities)

While this should be on your new home to-do list, it’s so important that it deserves its own section, too.

When you move into a new home, one of the first things you should do is set up your internet. This is a fairly simple process, but it’s important to do it as soon as possible so you can start using your internet right away.

Most internet providers will require you to set up an account and tell them your new address. Then, you’ll schedule an appointment with a technician who will come within a certain window of time. Depending where you live, this process can sometimes take weeks. As such, you should contact your internet provider as far in advance as possible to schedule an appointment when you know you’ll be moved in.

In addition to your internet, you’ll also need to set up your electricity. To do this, contact your local electricity provider and set up an account. Some electricity providers require you to pay a deposit before they turn on your service. To avoid getting caught off guard with a surprise fee, be sure to ask about this when you’re setting up your account.

Do a deep clean of your home

Before moving all of your belongings into your new home, you probably should spend some time inspecting the cleanliness of it and doing a deep clean if necessary. After all, you’re probably not keen on living in a mess someone else created — especially since you’ve just given them a ton of money.

By doing a deep clean, you can rid your new home of any dirt, dust, or grime that may have been left behind. If you have time, it’s also a good idea to wash all the windows and curtains — or, if you have room in the budget, hiring professionals to do this for you.

By cleaning your new house thoroughly before you get settled in, you will start fresh in your new home and ensure that it’s comfortable for you and your family.

Check for damages and make repairs as needed

As you’re doing your deep cleaning, check for any damages or issues that may need to be repaired. This may include things like holes in the walls, chipped paint, loose tiles, running toilets, or cracked windows.

If you notice any damages, make a list of them so you can repair them before moving your belongings in. This will help you avoid any further damages and make sure your home stays in good condition — protecting your investment.

Paint and refinish as needed

Before you fully settle into your new home, you have a great opportunity to repaint rooms and refinish any flooring while the spaces are empty.

Take advantage of this time to repaint every room, touch up your trim, and refurbish or replace worn-out floors and carpets. This is especially important if the home has carpeting that is heavily soiled or dated in any way.

In some cases, you may decide to completely redo the floors — especially if there are extensive repairs or damages that you did not notice while you were moving in.

Consider the flooring

When you first move into a new home, it’s also a good time to consider the kind of flooring you want. Are you keeping the existing flooring? Or might it be time to install new flooring?

If the home has old carpeting, it might be time to replace it. Installing carpet flooring in homes can help enhance the warmth and style of your home. Carpet provides a soft surface to walk or stand on and adds a sense of warmth to your home. It is also a great choice for basements to brighten and warm the space.

In some instances, you may prefer ripping up carpeting and replacing it with wood flooring, tiles, or vinyl plank flooring that looks like wood. Whatever you decide, it’s much easier to update flooring before you’ve moved all your furniture and belongings into your new home.

Make sure you have everything you need to live comfortably

Once all of that is taken care of, it’s time to set up your home with everything you need to live comfortably. Things like blinds, good lighting, air conditioning, and adequate heating are all elements that go a long way toward making your house a comfortable place to live.

This is also a good time to go through and update older or outdated light fixtures with more modern options that may better suit your style and preferences. For example, you may look to move away from more conventional lighting systems toward LED options that cost less and are better for the environment.

New Home Wishes

At this point, you’ve studied the ins and outs of your beautiful new home and have done what needed to be done to prime the space for you and your family. Best wishes throughout the entire process!

Now, it’s time to get unpacking and start settling into your new place. After the long, bumpy home buying and moving process, you deserve to sit back and enjoy everything your new space has to offer.

Good luck and welcome to your lovely home and fresh start! Enjoy all the happy and new memories you and yours make there, and don’t forget to take the time to properly introduce yourself to your new neighbors after you move in. Your new beginning can be even more rewarding with the right support system of those immediately around you, in addition to your family members and friends.

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Real Estate

9 Most Common Home Repairs and Their Costs

For many new homeowners, the thought of owning their own property gives them a sense of pride. If you’re a homeowner, you’re likely well aware of the ever-present threat of having unexpected home repair costs. However, you might be more focused on all the positives of owning a home.

But unfortunately, as time wears on, things will break and you’ll often have to come out of your own pockets for repairs. And unfortunately, some homeowners don’t budget for these repairs, which means they’re often not prepared to foot the bill.

While the cost of different home improvements can vary by several variables, American Family Insurance follows a good rule of thumb that says “Homeowners should budget at least $1 per square foot of their home’s livable space for annual maintenance and home repairs.”

By discussing some of the most common home repair costs, we hope to help you prepare for various out-of-pocket expenses.

Potential Costs of the Most Common Home Repairs

You can do everything you can to keep potential home repair costs down, from maintaining your gutters to fixing a faucet drip right away.

So, addressing small problems before they become big ones can make a huge difference in keeping home maintenance costs down. But what if something unexpected happens like a tree falling on your roof or a power surge that damage’s your home’s electrical wiring?

Whether you’re doing everything right or things happen that are out of your control, damage, as well as wear and tear, are bound to happen.

Below are the most common issues many homeowners face when it comes to repairs.

1. Foundation Repair

Unfortunately, water or any type of moisture is a foundation killer. Water exerts what’s called hydrostatic pressure on your home’s foundation, which causes foundation walls to crack and bow, resulting in foundation leaks.

Also, if you live in an area where the soil contracts during the dry season and swells during the rainy season, this can damage your foundation as well.

The cost of foundation repair varies, but usually ranges between $500 and $10,000. So, the actual cost often depends on the extent of the damage and where you live. But on average, expect to pay around $4,000 to $5,000 if the damage isn’t too severe.

2. Electrical Issues

 

If you’re moving into a new home, it’s important to assess the security of the property as soon as possible.

Your home’s electrical system is another common issue you may have to worry about in the future. Whether you’re dealing with faulty outlets or problems with the wiring of your home, it’s best to seek help from an electrician. And unfortunately, due to the potential dangers and complexity of the job, electrical work can be expensive.

The average cost to repair minor electrical issues (i.e. light switches, outlets, etc.) ranges between $141 to $419. For larger jobs, the cost typically goes from $2,000 to $6,000 and up.

3. Roof Repair

 

Your home’s roof is susceptible to a range of problems, from rot to leaks. And this can lead to even bigger problems. This is why it’s so important to get your roof repaired right away if you suspect damage.

Less severe damage like spot leaks and missing shingles could cost between $300 to $2,000. For a full roof replacement, you could be looking at up to $11,000 in repairs.

4. Water Damage

 

Water damage is one of the most devastating issues many homeowners deal with. It can lead to mold and mildew, damage the structural elements of your home, and cause pest infestations. So, beyond posing a risk to your health, water damage can also hurt your finances, leading to a range of costly repairs.

The average amount homeowners pay for water damage is $3,046, with costs ranging between $1,181 and $4,938.

5. Replacing a Water Heater

Like most other systems and appliances in your home, your water heater has a limited lifespan of about 8 to 12 years. Of course, depending on certain factors, it can go out way before that.

Compared to other issues within your home, water heater repairs and replacements are often less expensive, costing an average of $579 to repair and up to $1,300 to replace.

6. Septic System Repair

Your septic system requires more care and maintenance than you might think. For example, something as simple as flushing the wrong chemical down the drain can put your entire septic system out of whack. A damaged septic tank is often a messy problem that isn’t cheap to fix. Expect to pay around $17,00 to $19,500, depending on the extent of the damage.

7. HVAC Repair & Replacement

 

From improperly using your thermostat to not changing your air filter regularly, you could be wreaking havoc on your HVAC system. And your HVAC system is one of those repairs you just can’t put off.

On average, HVAC repairs cost between $150 and $450. But if your unit requires total replacement, the cost will likely be between $4,850 and $9,400.

8. Mold Removal

 

Mold can have so many damaging effects on not only your home, but also on your family’s health. Whether it’s affecting your home’s walls, ceiling, roof, or foundation, it’s important to get on top of it right away—before it gets worse. The longer you wait, the more extensive the damage will be.

The average cost of mold remediation is around $2,200, but could be more if the damage is really severe.

9. Termite Damage

 

It’s hard to imagine how something so small could cause severe damage to your home. Yet, termites could end up costing you thousands of dollars in repairs. And unfortunately, standard home insurance policies don’t cover such repairs.

The average cost to repair termite damage is $565. But to repair extensive termite damage, the average cost is around $8,000.

Conclusion

No matter how new you are to homeownership, home maintenance is inevitable. So, taking proper care of your home and paying for necessary repair and maintenance costs are key to keeping one of your biggest investments in tip-top shape. With proper home repair budgeting, you can ensure your home is always in good condition. We aim to help you succeed in every phase of your homeownership journey. Sign up for FREE to get more homeowner tips, rewards, discounts and more!

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1st Time Homebuyer Guides Real Estate

Beginners Guide To Home Inspection

After you’ve made an offer on a house and the seller accepts it, it’s time to enlist the help of home inspection services to make sure the property is in good shape. While some people skip the home inspection process — particularly first-time home buyers — that is not advisable. Not paying for a home inspection before buying a property can be very costly. You might end up with a property full of asbestos, with a radon problem, or a faulty HVAC system or sprinkler system that needs to be updated.

As the name implies, a home inspection is a professional’s visual examination of a home after a seller accepts an offer but before the deal closes. By hiring a home inspection company that has years of experience to examine the property you’re considering, you get access to a comprehensive report you can use to determine whether to finalize the real estate transaction.

For people trying to sell their homes, preparing for a home inspection is a very crucial step. The home inspection results determine whether the property will be acceptable to the buyer. Hence, most homeowners who sell properties try to make sure everything is in complete order and working condition before an inspection so they have peace of mind. Some homeowners even opt to conduct a pre-listing inspection on their own properties to make sure everything checks out before putting their house on the market.

The better the condition of the home during the inspection, the more reasonable the selling price sounds to the buyer. After all, when a home is in tip-top shape, buyers won’t have to fix things like fireplaces or rebuild dilapidated porches.

During residential inspections, the professional checks various things around the property. These include the building’s interior, exterior, and facilities present. The home inspector’s job is to see if everything is in good condition while conducting mold testing, radon testing, and well testing to make sure everything is in decent shape.

What is a home inspection?

A home inspection is a visual examination of a structure by a professional to evaluate the general condition and facilities present on the property and ensure it is high-quality. The professional home inspector does a walkthrough and looks around the property, from the foundation of the building to its roof. Once they finish, they produce a comprehensive report about their findings in the home.

During the property inspection, the home inspector pays more attention to things that might need repairs or replacement. The inspector will also identify areas that might pose a potential safety hazard during the inspection process. The better the condition of the home, the more positive the result of the inspection will be.

The inspector documents all their findings and submits a well-written report about the property to the party that hires them. While inspection results do not necessarily determine property value, they assure buyers that what they are purchasing is in good condition — much to the delight of real estate agents. However, most home inspections involve only a visual examination and not in-depth structural testing.

When an inspector submits a home inspection report that highlights significant issues, the client and the owner can discuss how to solve the problem before the transaction closes. In most cases, both parties will negotiate through their realtors to see what the seller is willing to fix.

Home inspection contingencies

Many individuals make use of home inspection contingencies, which means that the purchase of the property will be dependent on the home inspection result. If the inspectors finds any problems, the buyer can decide to reconsider the purchase or talk about potential repairs with the seller.

Individuals that choose to go with such a contingency have a specific time frame in which they must carry out the inspection process. This period is usually around two weeks. After this period, the inspection process should be over. That means all examinations that require a specialist — such as electrical systems, thermal imaging, or wind mitigation — need to be completed within the given time frame.

Home inspection contingencies are very helpful in preventing costly surprises later on after the purchase. If any problems are found, they can be settled earlier by the seller or the interested party can decide to pull out of the deal. The quicker the home inspection, the faster the value comes through.

How the home inspection process works

During the inspection process, core parts of the house are examined, including the grading near the foundation, railings, and decks. Inspectors also look for signs of insect damage on wood, roof components, and chimneys.

Additionally, inspectors check other things like the home’s insulation, cooling and heating system, electrical system, windows, toilets, and water pressure. Compared to new construction, older homes tend to have more problems that need fixing or replacement due to wear and tear over the years.

That said, problems can be identified from inspections — even at new properties. Sometimes builders make mistakes that might turn up on inspection results. People who take advantage of home inspection contingencies can only back out of deals if there is significant damage to the property. Insignificant damage that can be easily fixed, like broken doors, usually doesn’t count as a reason to back out on the purchase.

Once an inspection is completed, a buyer can discuss repair matters with the seller of the property. However, if the seller refuses to comply with the repair process, the buyer is free to back out of the deal. In this light, home inspections are very useful for people looking to purchase properties as they help them avoid extra spending on repairs.

Home inspections are not too expensive. Their cost usually depends on the location, size, and age of the property. You may be on the hook for some extra fees for things like water tests and termite inspections. On average, a home inspection costs around $400 but can rise as high as $1,500 or even more. Either way, this is a good use of money.

During a home inspection, the inspector will check some significant areas of the building.

1. Foundation

The foundation of a home is one of its most vital parts. As such, it’s a significant area for inspection. Building inspectors pay a lot of attention to the foundation of homes during the process. They check for signs of damage and wear and tear around the foundation.

Most of a building’s foundation is not visible above ground. Hence, the inspection is usually just a surface check. Some signs signify damage to the foundation that professional building instructors will discover. If the inspector finds any problems, they will document them.

2. Building structure

After checking the foundation, the inspector examines the whole structure of the building. At this point, the building inspector checks through the entire building to see if any parts might need repair or pose potential safety threats. The inspector notes any findings in the home inspection report.

The building inspector will also examine the weight-bearing capacity and structural integrity of the building to see if the property is still structurally sound and fit for habitation. If anything is unclear, the situation may require a specialist for clarification.

3. Interior and exterior

The inspector will also inspect the exterior and interior of the home. For the exterior, they will check things like mold and cracks on the wall. They’ll also look at wooden components to see any signs of termite infestation. The inspector will also examine the paint condition, both internally and externally.

During this process, the inspector checks areas like windows and the roof for signs of damage. They also examine roof components and ceiling parts for leaks or breakage. Additionally, the inspector looks at staircases and railings inside and outside the house see if they’re safe for use or need repair.

The internal condition of the house, including the floorboards, kitchen, and bathrooms, are also examined by the building inspector. If any problems are found, they will be recorded and presented in the inspection report that will be submitted to the client or potential buyer.

4. Electrical system

The electrical system of the house also goes through inspection. Specialists invited by the building inspector usually carry out this aspect of the home inspection process. The specialist examines all the electrical connections and the condition of the wires existing in the home.

The inspector marks and records damaged and exposed electrical components in their report. While an electrical evaluation might cost a little bit extra, homebuyers will want to know the condition of the electrical system in the home before purchasing it to avoid unexpected expenses.

5. Plumbing system

A home inspector checks the water pressure and plumbing system during a home inspection. During the process, the inspector will ensure that water flows at the correct pressure from all the faucets in the home — both in the kitchen area and toilets and bathrooms.

The inspector will also test the drains to see if water flows out correctly or if there’s a clog. If the inspector finds broken pipes or faulty parts, they will record them in the inspection report. The inspector will also look at the water temperature as well as leaks and rusted parts.

Home inspection reports include detailed explanations regarding any structural damage or areas of the home that need repairs. The building inspector makes known all the aspects that need maintenance or repair, whether internally or externally. The home inspector’s job is complete after submitting the report. Anything that happens next depends on negotiation between the buyer and seller.

Conclusion

The home inspection process is a helpful method to evaluate a building’s condition before purchasing a property. The inspector’s job is to examine various aspects of the home to see if any areas require maintenance or repairs. Any issues the inspector detects are piut in an inspection report, which homebuyers can use to figure out their next steps.

As you begin searching for a home inspection company, you may want to contact the American Society of Home Inspectors (ASHI), a group that can help you find experienced inspectors if you’re having a hard time. Since inspectors won’t find every problem with every house, first-time homebuyers should strongly consider buying a home warranty. This can help cover some expenses if issues surface after a deal closes. Regardless, buyers need to strongly consider springing for home inspections before buying a home. Failure to do so can have catastrophic consequences down the line. And as a first-time homebuyer, that’s something you simply can’t afford.

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Guides Homeowner Tips

Best Tips For Repairing Your Credit

If you’re looking for ways to repair your credit, you’re not alone.

According to the latest data report from the Federal Reserve Bank, Americans currently have over $804 billion dollars of outstanding debt.

What does that really mean? While some people keep their credit in check, others aren’t as fortunate. Struggles due to the pandemic or even just overspending can quickly lead to financial ruin.

But it’s not all bad news. Even if you’re behind on your payments and your credit history leaves something to be desired, there are ways to regain control of your debt. When you have a good credit score, it’s easier to obtain personal loans with lower interest rates. So, if you’re in the market to buy a house for the first time, you should absolutely prioritize improving your credit score.

With all this in mind, let’s take a look at six actionable steps you can take to repair your credit score and start to build credit today.

Check Your Credit Report

Your credit report says a lot about you. It shows how often you make late payments, what your credit limit is, how much available credit you have, how many credit accounts you have, your credit utilization ratio, your credit card balances, when the last time you opened a new credit card was, and more.

As such, it’s important to know if what’s being reported is accurate. Knowing your credit score gives you a general idea of your own creditworthiness.

However, that’s not always enough. You also need to review your credit reports to identify potential errors.

The first step is ordering a free copy of your annual credit report from a credit reporting agency. Why pay an annual fee for something that is free? To do this, request copies from all three major credit bureaus: Equifax, Experian, and TransUnion. You can also get a free credit report at annualcreditreport.com.

Once you obtain a copy of your credit report, analyze it to make sure everything checks out. If, for example, you see that your report reflects inaccurate information — like missed payments on personal loans when you actually paid your installments on time — you need to address the issue.

Believe it or not, credit-reporting errors are common. In fact, approximately 34% of Americans find at least one error on their credit reports, according to a Consumer Reports investigation.

Once you receive them, go over your credit file with a fine-tooth comb. Make sure your personal information is correct — like your name, address, and Social Security number. If it isn’t, update it immediately.

While having the wrong birth date or incorrect spelling of your name doesn’t affect your credit, it can make verifying your identity for future loans difficult. It can also make it hard to open new accounts.

Look at each account you listed on your reports. Verify that your payments are being reported correctly and on time. You should also verify that all of your accounts are open and haven’t been closed without consent. If you have any negative marks on your report, make sure they are legitimate.

It’s almost important to check your hard and soft credit inquiries. Hard inquiries are inquiries that can impact your credit score. These appear on your report whenever you apply for a credit card or loan, like a mortgage. They can drop your score by several points for some time, so you need to keep those to a minimum.

Soft inquiries, on the other hand, don’t impact your credit score. These are usually done to prequalify you for credit line increases and new credit offers.

If you do find any errors, you need to file a dispute. All three bureaus offer online dispute options to file your claim. Unfortunately, it can take up to 30 days to investigate and remove any errors from your report. Patience is a virtue, as they say.

During this process, a bureau might say that the reporting is correct. Be sure to submit any supporting documentation you have to avoid any complicated disputes.

2. Set up credit monitoring

Credit monitoring can also help you repair your credit. If you’re interested in keeping real-time tabs on your FICO score, there are a lot of services to choose from, all of which offer various levels of protection. Some of the most popular free providers include Experian BoostCredit Karma, and Credit Wise by Capital One. Depending on your specific credit needs, there might also be more comprehensive paid versions of the service.

In addition to helping you stay on top of your accounts and improve your debt management skills, monitoring your accounts can help you avoid identity theft — or at least detect that you were a victim of a scam immediately after it occurs.

3. Use debt consolidation services

If you have a low credit score or errors on your report, debt consolidation services can help. These companies will work on your behalf to help improve your score and consolidate your debt.

However, with so many credit repair companies claiming to be the best, it might be tough to determine which are legitimate. To make your decision easier, some of the best debt consolidation companies include:

All three of the above-mentioned companies offer credit repair services and debt consolidation loans. It’s important to note that credit repair is not the same as hiring a credit counselor, who simply provides you with tips to manage your finances.

Credit repair services, on the other hand, create repayment plans with creditors, help remove errors on your credit reports, and ultimately help you qualify for home loans or new lines of credit.

It’s worth noting that, under the Credit Repair Organizations Act, the Federal Trade Commission (FTC) prohibits credit repair services from asking for advance payments. So, if you need credit repair services, don’t shy away thinking you will have to pay up ahead of time.

4. Pay on time

Even if you can only afford the monthly minimum payment, always strive to pay your credit card and student loan bills on time. Your payment history accounts for 35% of your total credit score, so paying on time can make a huge difference in your personal finance situation, helping you avoid a poor credit score.

If possible, consider setting up all of your accounts on autopay. That way, you’ll never miss a payment. If you go this route, however, you need to make sure you have enough funds to cover costs each month.

If that’s not an option, you can always set up payment through your bank and have a certain amount transferred with bill pay. Most banks offer this service, so it’s just a matter of configuring the transfer.

5. Lower your credit utilization score

Even though paying with credit is convenient, doing so too often can also lower your score, resulting in bad credit.

At a high level, your credit utilization score is what lenders use to gauge your spending habits. Ratios less than 30% but more than 0% are considered excellent. If your utilization is higher than that, it’s negative information that credit card issuers will use to potentially deny your application.

Optimizing your utilization rate is as simple as using less while paying more. You can improve your score by paying in cash and trying to pay more than the minimum payment due each month.

6. Pay off debt

There are two kinds of debt: good debt and bad debt. Good debt has the power to make you money in the long run, like your mortgage. As you pay off your mortgage, you build equity in your home.

Your car payment and material goods are examples of bad debt. Their value depreciates over time and, in most cases, you never recoup the money you originally spent.

Credit card debt is another example of bad debt. While building good credit is important, it’s also possible to have too much credit if you’re not good at managing your money. You might be approved for numerous lines of credit, but what good is it if you can’t pay them off?

To get things going in the right direction and start paying off your debt, you can use the snowball or debt avalanche method.

The snowball method focuses on the smallest balances first. To get started, make a list of all your outstanding student loan, auto, home, and credit card debt. After you make the minimum monthly payment, take any extra money you have and put it toward paying off your smallest account first.

Your goal is to pay off the balance, not the interest. Once you pay it off in full, move on to the next account, and so on.

The debt avalanche method works the same but in the opposite way. Focus on the largest debt first and work your way down to the smallest. Any extra money you have goes towards the principal, not interest.

Wrapping things up

At the end of the day, having a solid credit score makes life easier.

If you’re struggling with bad or fair credit, take comfort in the fact that you’re not alone. And keep in mind that this post doesn’t explore every single thing you can do to improve your credit. For example, if you’re not good at using credit cards, you may consider applying for a secured credit card that you fund ahead of time to get used to using cards to buy things.

Ultimately, you need to know that repairing your credit is possible. All it takes is a solid strategy and the desire to make it happen.

But once you start seeing success, it’ll motivate you to do even more. Before you know it, you’ll be living the good life — free of bad debt with an exemplary credit score that helps you achieve your dreams of homeownership before you know it.