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Renting vs. Buying: Which One's Right for You?

February 9, 2012 3:40 pm

While today’s real estate market is full of low mortgage rates and attractive prices, purchasing a home is still out of reach for many Americans who are putting off purchasing a home and going the rental route instead.

According to a 2010 study of the Joint Center for Housing Studies of Harvard University, over the last five years, the number of renter households rose nearly 10 percent (3.4 million).

A good rule of thumb when considering whether to rent or buy is to predict how long you will stay in the home. If you plan on moving and selling in less than five years, renting is probably a better option right now.

One of the main factors keeping people from buying is the difficulty in obtaining the mortgage they want to afford the property they desire, causing them to either shop for something smaller and less expensive, or rent for a while until they can improve their financial situation.

The main problem most people have with renting is that you won’t be gaining equity and it feels like you’re throwing your money away. Plus, there’s no tax advantage to renting and you are limited with what changes you can make to the home.

Still, there are many benefits to renting. For one, you don’t need to make a long-term commitment, and it gives a future homebuyer the flexibility and time to figure out the best course of action both personally and economically. Other positives include being able to move when the lease expires, there’s less maintenance work required, and you don’t need to have a large sum of money available up-front to live in a nice home.

For those that choose to buy, over time the mortgage balance decreases and equity builds. You also have the freedom to make any decisions you want—including tearing down walls, building decks and remodeling any room the way you have always dreamed.

On the downside, property values can decrease and you can find yourself owning a home worth a lot less than you paid over time. You also need to have a lot of money up-front and it can sometimes take a lot of time, money and effort to sell if you want to move quickly. Plus, if something breaks or goes wrong, there’s no one to bail you out—you must fix the problem yourself.

While every situation is unique, there are a plethora of rent vs. buy calculators available on the Web that can also help make your decision easier.

To discuss whether renting or buying is right for you, contact our office today.

Published with permission from RISMedia.


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Radon Testing Crucial for Peace of Mind

February 9, 2012 3:40 pm

According to the Environmental Protection Agency, nearly 1 out of every 15 homes in the U.S. is estimated to have elevated levels of radon, and the colorless, odorless, tasteless gas is estimated to cause thousands of deaths each year, making it crucial that you take the time to get your dream home tested for radon before you sign on the dotted line.

While you can’t see, smell or taste radon, exposure to the gas can cause lung cancer. In fact, the Surgeon General has warned that radon is the second leading cause of lung cancer in the United States today after smoking.

Radon comes from the natural (radioactive) breakdown of uranium in soil, rock and water and can sneak into the air you breathe by penetrating the structure through cracks in the foundation. The gas can be discovered in all parts of the country and can cause a dangerously high indoor radon level in any home.

While it’s not a requirement that you test for radon when you make an offer to buy a home in many places, it’s probably a good idea to ask for a Radon Inspection Contingency.

A Radon Inspection Contingency can put some structure into getting a “short-term” radon test done on any home to make sure the levels of radon on the lowest level of the home are below the 4.0 pCi/L level.

This target level was set by the U.S. Congress for indoor air quality, and the U.S. EPA enforces that mandate.

Buyers interested in purchasing a home shouldn’t be the only ones concerned with radon testing. In fact, if you’re getting ready to sell your home, you should test for radon before you put the home on the market. This can save valuable time during a real estate transaction, as long as you have all the paperwork and testing data to show the prospective buyer.

The quickest way to test for radon is with short-term tests, which remain in your home for two to 90 days, depending on the device. The most common detectors are charcoal canisters, alpha track, electret ion chamber, continuous monitors and charcoal liquid scintillation.

When performing a radon test, be sure to test the lowest level of the home that you currently live in, or a lower level not currently used, but which a buyer could use for living space without making renovations. The result of the radon test will provide important information about your home’s radon level that potential buyers may want to know.

If you find that your home has high levels of radon, reducing the radon level is an easy process. Adding a radon reduction system can reduce radon levels in your home by up to 99 percent, and the system costs less than $1,000 to buy and install.

Another option is to install a Soil Suction Radon Reduction System in the basement near a sump pump system so that it can be vented outside where a pressure fan is installed.

New homes can be built with radon resistant features that minimize radon entry and allow for easier radon reduction if high levels should be determined to exist. These features cost much less to install during the construction process rather than waiting to add to an existing home later. Some municipalities and states are even considering adopting radon resistant construction features as a part of their building codes.

Buyers and sellers should both be smart about radon. Every new home should be tested after occupancy, even if it was built with radon-resistant features or has a radon reducing system installed.

To learn more about radon testing, contact our office today.

Published with permission from RISMedia.


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VA Loans Provide Veterans an Added Advantage in Today's Volatile Market

February 9, 2012 3:40 pm

In today’s volatile market, getting the financing you need to purchase a home is often a confusing and time-consuming process, however, it’s crucial that prospective buyers do their homework before picking the loan that’s right for them. VA loans, which are often overlooked, are a great option for past and current military personnel looking for financing in today’s more stringent mortgage environment.

Established in 1944 as part of the Servicemen’s Readjustment Act, VA loans are available for any individual who has served in active duty in any branch of the U.S. military for a minimum of 90 days.

“The beauty of this loan is that it allows financing without requiring a down payment,” said Eric Kandell, founder of lowvarates.com. “It also doesn’t allow the mortgage lender to charge the veteran private mortgage insurance.”

A VA loan does require the borrower to pay a one-time funding fee on their purchase, however, which can be paid up front or financed into the total cost of the loan. The funding fee for regular military members is 2.15 percent of the loan while Reservists pay a fee of 2.40 percent.

In addition to servicemen and servicewoman, non-active duty personnel, such as individuals in the Army Reserves or National Guard, may apply for a VA-backed mortgage provided they have completed six years of service. The spouses of deceased or missing military members are also eligible if they have not remarried.

“I’ve closed more VA loans in the past two years than in the past decade,” said Steve Thorne, area manager for First Financial Services, Inc. in Raleigh, N.C. “It really is a great benefit to the veteran in the ‘New Mortgage World.’ The key to getting more veterans to take advantage of this benefit is simply an awareness of the benefit.”

Statistics provided by the Department of Veteran’s Affairs show that there are approximately 25 million homeowners currently eligible for a VA loan. However, only 10-15 percent of those who are eligible have taken advantage of the VA loan program when buying or refinancing.

One reason for the low numbers is that for many years leading up to the mortgage crisis, there were numerous conventional mortgage products that were easier or more economical to the veteran than the VA loan.

“In the wild, wild west of mortgage lending from the early 2000s to 2008, 100 percent financing was commonplace,” Thorne said. “So why pay the VA funding fee just to have 100 percent financing? Not to mention the VA control of the appraisal process, understanding residual income and all the additional disclosures. It was a more cumbersome process than the ‘come on down, everybody gets a loan’ of the conventional arena.”

Many veterans, especially those not so recently discharged, don’t fully understand the benefits of a VA loan, and many aren’t even aware that they’re entitled to one. With a VA loan, veterans can literally buy a home with little to no money out of pocket.

“In the past, veterans were told about other financing on the market and people were more inclined out of ignorance to use non-VA loan financing,” Kandell said. “It’s a great loan and you are going to see a massive shift in numbers going forward, as these same real estate agents will be begging you to go VA now.”

Those interested in learning more about VA loans should talk with a mortgage representative to discover their options for getting the best use of these funds.

Borrowers who received a dishonorable discharge from any military branch are not eligible.

For more information about VA loans, contact our office today.

Published with permission from RISMedia.


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Out of Sight, Out of Mind: Why Being Present at a Showing Can Hamper Your Sale

February 9, 2012 3:40 pm

If your home is on the market, you know just how important it is to keep it clean and tidy in case your agent calls with a last minute showing. While piling in the car each time a showing rolls around can feel like a chore, real estate professionals across the board agree that it’s best to be out of sight when a potential buyer comes to view your home.

When buyers walk into a home and see the owners present, they become uncomfortable and feel as if they’re intruding, which may cause them to race through the home without getting a real feel as to whether or not they like it.

One rationale for staying behind is that the sellers often think those looking at the home won’t be able to find everything and they must be there to point out the important features. Another reason homeowners think it’s necessary to be present during a showing is because they feel they can better “sell” the property by talking about the positives.

Truth be told, that’s rarely the case. Your real estate agent is trained in providing all the details related to the home, the property and its surroundings, and they also know how to read prospective buyers so they can relay the information at an appropriate time. In fact, if you bombard a seller with too much information all at once, you’re going to leave a less than favorable impression.

Let the buyer discover the wonderful things about your home on their own. If you have a nice home with all of the features they’re looking for, they don’t need you pointing things out. You may even hurt your chances of getting the home sold by calling attention to something they aren’t looking for.

When prospective buyers know you’re there —or following them around room to room—they are less likely to open closets or doors because they feel as though they’re intruding. This keeps them from viewing everything the home has to offer, making it less likely that they’ll be interested in putting an offer on the home.

While some sellers choose to wait outside in their car or on the patio during a showing, a better alternative than taking the tour with a prospective buyer, it’s still not ideal. Again, if prospective buyers feel like they’re being rushed, they aren’t going to spend an adequate amount of time viewing your home. Instead, they’ll rush through the home and move on to the next property on their list.

It’s understandable that sellers don’t always want to leave—especially when several showings are scheduled for one day. Plus, with little ones, dinners to cook and work to be done, it’s not always feasible to get up at a moment’s notice to leave. This is especially true during the cold winter months, when you can’t simply take a walk around the block or head to the park and read for an hour.

Remember, you want buyers to spend as much time as they want in your home, envisioning the possibility of living there. While getting out of the house may not always be convenient, it’ll be worth it in the long run.

For more information about home inspections, contact our office today.

Published with permission from RISMedia.


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In this Edition: VA Loans, Renting vs. Buying

February 9, 2012 3:40 pm

Our lead story in this month’s Home Matters, brought to you through our company's membership in RISMedia’s Real Estate Information Network® (RREIN), examines how your presence at a showing can actually work against you when trying to sell your home. Other topics covered this month include the debate between renting vs. buying, what you need to know about testing your home for radon, and more. We hope you enjoy this month’s edition of Home Matters and as always, we welcome your feedback. Email us anytime!

Published with permission from RISMedia.


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Top 10 Moving Destinations Reveal Sunny Trend

February 9, 2012 3:30 am

Americans are following the sun, according to Penske Truck Rental’s second annual “Move Ahead” ranking of top moving destinations. Similar to the firm’s 2010 findings, warm locales top the list of top relocation spots.
  1. Atlanta
  2. Phoenix
  3. Orlando, Fla.
  4. Dallas/Fort Worth
  5. Chicago
  6. Houston
  7. Denver
  8. Seattle
  9. Sarasota, Fla.
  10. Charlotte, N.C.
Atlanta once again tops the list as market destination of choice and no region moved up or down more than two positions, with Dallas/Fort Worth jumping up two, from fourth to second. Half the list (Atlanta, Chicago, Houston, Sarasota, Fla., and Charlotte, N.C.,) remained in identical positions.

The Penske list is compiled through online consumer truck rental reservations and through the firm’s call centers.

Published with permission from RISMedia.


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Like a Color? Just 'Chip It'

February 9, 2012 3:30 am

Next time you’re surfing the Web and come across a color that moves you, capture it and replicate it with a new interactive tool from Sherwin-Williams: “Chip It!”

This innovative Web-based tool allows consumers to select any online image and instantly identify the Sherwin-Williams paint colors that correspond to the colors contained within the picture. This allows consumers to identify the colors that inspire them while browsing the Internet in order to use them for their own decorating purposes.

To get started, consumers create a profile at www.letschipit.com and then add the Chip It! bookmarklet to their Internet browser toolbar. This bookmarklet allows users to identify up to ten Sherwin-Williams paint colors represented in online photos simply by scrolling over the image. From there, consumers can add the photo and corresponding color palette to their Chip It profile, share the creation socially or print it out.

"We know that finding the right color is the biggest roadblock for consumers when they are ready to paint a room – they want it to be right the first time," says Jackie Jordan, director of color marketing for Sherwin-Williams. "Consumers seek inspiration from a wide range of places. We want to help them take that inspiration and turn it into a reality."

For more information, visit www.letschipit.com.

Published with permission from RISMedia.


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HUD Adds 31.5 Million Dollars in Funding for Very Low-Income Seniors

February 9, 2012 3:30 am

The U.S. Department of Housing and Urban Development (HUD) recently announced the addition of $31.5 million in funding aimed at providing very low-income senior citizens with access to affordable housing. The funding is designed to help non-profit organizations in five states produce additional accessible housing, offer rental assistance, and facilitate supportive services for the elderly.

The capital advances and rental subsidies are provided through HUD’s Section 202 Supportive Housing for the Elderly. Section 202 grants provide very low-income elderly persons 62 years of age or older with the opportunity to live independently in an environment that provides support services to meet their unique needs. In addition to funding the construction, acquisition, and rehabilitation of multifamily developments, HUD’s Section 202 program also provides millions of dollars in rental assistance so that residents in selected developments only pay 30 percent of their adjusted incomes.

HUD provides Section 202 funds to non-profit organizations in two forms:
  • Capital Advances. This is funding that covers the cost of developing, acquiring, or rehabilitating the development. Repayment is not required as long as the housing remains available for occupancy by very low-income elderly persons for at least 40 years.
  • Project Rental Assistance Contracts. This is funding that goes to each development to cover the difference between the residents’ contributions toward rent and the cost of operating the project.
Residents must be “very low income” with household incomes less than 50 percent of their median for that area. However, most households that receive Section 202 assistance earn less than 30 percent of the median for their area. Generally, this means that a one-person household will have an annual income of about $13,500.

Source: hud.gov

Published with permission from RISMedia.


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6 Tips for Fighting Winter Weight Gain in Pets

February 8, 2012 9:30 am

Winter weight gain is an all too common struggle, and not just for humans. Weight gain in dogs and cats is more prevalent in the winter as well. When a dog that's used to getting a daily walk around the neighborhood is now only running outside for speedy breaks – or a cat that's accustomed to a romp around the yard is now reluctant to spending time outdoors – it naturally follows that the food they've consumed is not being burned as energy. Plus, when colder temperatures set in, activity levels drop, metabolisms slow, and hibernation mode sets in. It's the age-old evolutionary method for preservation.
To help pet parents keep winter weight gain at bay, petMD.com offers the following tips:
  • Create an exercise plan. This can include brisk walks, weather permitting, or activities like fetch modified for indoor play.
  • If getting enough activity may prove troublesome, consider cutting back on calories. This can mean cutting back on treats or decreasing the amount of kibble doled out. If you're worried about your pet feeling deprived, add fresh vegetables into the mix. Carrots make a great treat substitute.
  • Visit your veterinarian at the start of winter to get an accurate picture of your pet's current health. It is easier to maintain if you know what you're starting with.
  • If your pet is on the heavier side, or has a history of weight issues, continue to see your veterinarian once a month for a check-up to make sure the weight is not creeping on.
  • Learn the signs indicative of a pet being overweight or obese. The two areas it is easiest to spot weight gain in are the spine and the ribs.
  • If weight gain still does occur, consult your veterinarian for a cat or dog weight loss plan. You do not want to cut back drastically on food without a veterinary opinion.
The most important thing for pet parents to remember is that prevention is key. Stopping winter weight gain from occurring is much easier than helping your pet lose weight.

Published with permission from RISMedia.


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Survey Shows Jump in Student Loan Debtors Seeking Help

February 8, 2012 9:30 am

With student loan debt now topping U.S. credit card debt and few or no options available for distressed borrowers (including parents who co-signed loans and now face the loss of nest eggs, retirement homes and other assets), America faces the very real possibility of another major economic threat, according to a new survey and report from the National Association of Consumer Bankruptcy Attorneys (NACBA).

The NACBA survey of 860 bankruptcy attorneys nationwide found that:
  • More than four out of five bankruptcy attorneys (81 percent) say that potential clients with student loan debt have increased "significantly" or "somewhat" in the last three-four years. Overall, about half (48 percent) of bankruptcy attorneys reported significant increases in such potential clients.
  • Nearly two out of five bankruptcy attorneys (39 percent) have seen potential student loan client cases jump 25-50 percent in the last three-four years. An additional quarter (23 percent) of bankruptcy attorneys have seen such cases jump by 50 percent to more than 100 percent.
  • Most bankruptcy attorneys (95 percent) report that few student loan debtors are seen as having any chance of obtaining a discharge as a result of undue hardship.
  • More than four out of five bankruptcy attorneys (82 percent) see the limited availability of student loan discharge in bankruptcy as "a big problem" barring a fresh start for clients.
  • Seven out of 10 bankruptcy attorneys see the lack of ability to separately classify student loan debts for debtors using chapter 13 as a "big problem."
  • Nearly two out of three bankruptcy attorneys (65 percent) say that student loan provider debt collections have become "much more" or "somewhat more" aggressive in the last 18 months.
  • More than three out of five bankruptcy attorneys (61 percent) dealing with potential student loan debtor clients have seen cases of debts more than 15 years old still being pursued.
  • Titled "Student Loan 'Debt Bomb': America's Next Mortgage-Style Economic Crisis," the companion NACBA paper points out:
  • College seniors who graduated with student loans in 2010 owed an average of $25,250, up five percent from the previous year. Borrowing has grown far more quickly for those in the 35-49 age group, with school debt burden increasing by a staggering 47 percent.
  • Students are not alone in borrowing at record rates, so too are their parents. Loans to parents for the college education of children have jumped 75 percent since the 2005-2006 academic year. Parents have an average of $34,000 in student loans and that figure rises to about $50,000 over a standard 10-year loan repayment period. An estimated 17 percent of parents whose children graduated in 2010 took out loans, up from 5.6 percent in 1992-1993.
  • Of the Class of 2005, borrowers who began repayments the year they graduated, one analysis found 25 percent became delinquent at some point and 15 percent defaulted. The Chronicle of Education puts the default rate on government loans at 20 percent.
During January 2012, the National Association of Consumer Bankruptcy Attorneys (NACBA) invited more than 4,500 of its members to participate in an online survey. With 860 completed responses tallied, the online survey attracted a high percentage (19 percent) of potential respondents. The full survey questions and responses are set out in the survey report at http://www.nacba.org.

Published with permission from RISMedia.


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