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How to's and money-saving tips from resident homeowner and mortgage professional, Cathy West

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Make remodeling this weekend's project.

Easy ways to boost the value of your home

Improving the value of a home doesn't always require thousands of dollars and countless hours of sweat equity. In fact, it can be a lot simpler and less taxing than that. Whether getting ready to sell or just looking to increase the value of their property, homeowners can tackle these simple project ideas to spruce up their homes.

Ready, set, garden!
The first thing a potential buyer sees when checking out a property is the exterior of the house. To make a great first impression, owners should give their property a facelift by cleaning up the yard, fertilizing the grass and adding a fresh layer of mulch to garden beds. Simply planting attractive flowers or shrubs, adding outdoor seating or installing a fire pit can enhance curb appeal. Other easy fixes to the exterior of a home can also yield high rewards for sellers. In their annual Cost vs. Value report, Remodeling magazine listed the average return on investment for replacing a garage door at 98.3 percent

Start with the basics
It's common for homes to get a little run down through years of natural wear-and-tear. But minor defects that a seller may hardly notice anymore often jump out at potential buyers. Simple, cost efficient fixes like replacing a broken light fixture or a leaky faucet, patching up any holes or dents in the walls or swapping out rusted doorknobs or handles for newer models can positively change a buyer's impression of a home and won't break the bank.

Slap on a fresh coat of paint
One of the quickest ways to change the look and feel of a house is to paint its walls. However, some remodelers tend to go overboard. Homeowners should decide room by room whether the walls need repainting or just a good scrubbing to avoid making the project unnecessarily daunting. Choosing a color is especially important when repainting. According to Consumer Reports, most realtors recommend repainting walls in white, beige or neutral tones that won't distract buyers from the home's other features. After all, sellers want buyers to picture their own vision for the home rather than focus on the feeling they get from the color of the room.  

Get cooking on that kitchen
When it comes to deciding which room to give a little extra TLC to, homeowners should turn their attention to the kitchen. For most buyers, this is the heart of the home and it can be a major selling point if it looks good. Upgrades like stainless steel appliances, modern cabinets and drawers or new countertops can give the space a polished look and make it more attractive to buyers.

It's crucial that people checking out a home are able to appreciate all the work sellers have put into it to get it market ready. That's why it's is so important to clear out as much unnecessary junk as possible.  Clutter on the countertops or on the floor will distract buyers from those beautiful new remodels so remember to keep it clean.

Simple steps to improve credit

Simple steps to improve credit

For homeowners looking to get into the housing market, perhaps the most important part of making sure they're ready for the mortgage process is having a strong credit score. A good rating will not only help them get approved more easily by lenders as they shop around for the right home loan, but also unlock potentially massive savings in the form of lower mortgage rates.

Unfortunately, many would-be buyers may not know what goes into their credit scores in the first place, and therefore probably have little idea of how to deal with any issues that might have arisen, according to the Fair Isaac Corp., which pioneered credit scoring. Perhaps the most important aspect of understanding credit starts with ordering a copy of a credit report from one (or each) of the three major credit bureaus, and checking it carefully.

If consumers look at their reports and see any accounts they don't recognize, late payments that shouldn't be there or balances they don't think are correct, it's vital to contact both the reporting agency and the financial institution reporting the information about the issue, the report said.

Dealing with other issues
Of course, many people have lower credit scores not because of errors with their reports (though these are more common than some might expect) but because of how they have handled their credit in the past, the report said. For instance, people who have racked up large amounts of credit card debt will likely have lower credit scores than those who have not, and this may be even more true of people who have missed payment deadlines in the past.

Paying down outstanding balances to below 30 percent of combined credit card limits and making up for late payments by simply being on time with them for a period of several months are the two best ways to improve a score, according to Credit.com. However, it's also important to avoid signing up for new credit or close out old accounts. Combined, payment history and the amount of credit being used at any one time make up 65 percent of a person's score.

What's the timeline?
Those with middling credit histories may run into issues getting their credit cleared up quickly, depending on the hurdles they've experienced in the past, according to the credit monitoring bureau Experian. For instance, if accounts slip into delinquency and default, that can remain on a person's report for up to seven years, and those who filed for bankruptcy in the past may see that item listed on their credit reports for as long as a decade.

When trying to improve credit to the point that mortgages become more affordable, consumers may be wise to do some research online or work with a real estate professional to get a better understanding of what will be expected of them from lenders. Generally speaking, the higher the score, the better the mortgage deal, but it might require several months of work – or more – to get to an ideal situation.

For more information about this article, call 866-614-5959.

Tax benefits of homeownership

Tax benefits of homeownership

While there are many reasons people may want to own a home, and plenty of associated benefits with doing so, one positive that often goes under-discussed is that homeowners in most states immediately get a lot of tax advantages. 

For instance, most interest charges owners pay on their mortgages are immediately tax-deductible, as are a number of other expenses often associated with owning a home, according to the Tax Policy Center. For the current tax season (related to financial issues from 2017) that includes giving owners the ability to write off their property tax payments to local governments on their federal returns, potentially helping them save  thousands of dollars.

However, there are some requirements that need to be discussed here, including the fact that these expenses would need to be itemized, and in some cases may not exceed the standard deduction.

Digging in
The current limit on mortgage interest deductions is $1 million, which most people are unlikely to exceed, the report said. About 20 percent of all tax payers, regardless of whether they own a home, get a benefit from the mortgage interest deduction.

In addition, when homeowners itemize their property tax deductions, they may get various benefits depending upon their tax brackets, the report said. For instance, those who write off $2,000 in a high tax bracket will typically get more savings; 85 percent of the monetary benefit extended to homeowners through this deduction goes to people earning at least $100,000 annually.

Another deduction
Meanwhile, homeowners from more challenged financial backgrounds who are required to pay private mortgage insurance are able to write off those costs in certain instances, according to the National Association of Realtors. When consumers put down less than 20 percent on their homes, they are typically required to pay for PMI, but these costs can be used to reduce income on a tax return.

There are other types of tax benefits for homeowners as well, but they are often less applicable than those listed above, according to Forbes. For example, when homeowners sell their properties at a profit, that money is not subject to capital gains tax. In addition, those who have taken out home equity loans or lines of credit are also able to write off their interest charges for that as well.

These all come in addition to the fact that, in many cases, owning a home is a lot cheaper than renting and provides a significant long-term investment for many would-be buyers, especially in today's market.

However, as with any other financial decisions related to homeownership, it's vital for shoppers and owners alike to examine all their options and potentially discuss whatever they are planning with a real estate, tax or financial professional. Doing the homework and having all the right information will help consumers make the best possible choices for their finances going forward, and could save themselves thousands of dollars in some instances.

For more information about this article, call 866-614-5959.

Ways to save for a down payment

Ways to save for a down payment

One of the biggest hurdles young people in particular might face when they want to buy a home is that it's quite difficult to put in the work to save up for a sizable down payment. In a lot of cases, the lump sum payment required by lenders could stretch into the tens of thousands of dollars, and it's not always easy for those in the first decades of their careers to put that kind of money aside.

With that in mind, experts recommend taking a number of steps to deal with this issue without a significant overhaul of financial habits, according to the Atlanta Journal Constitution. For instance, any extra money that comes in beyond a normal salary – whether that's a gift from parents, a bonus at work, tax refunds, etc. – should be put into a savings account, preferably one with a higher yield than normal. While it may not always seem like the most fun thing to do with an extra few hundred dollars (or more) a little here and there can really lay the groundwork for a solid savings effort.

Finding hidden expenses
Meanwhile, many young people will sign up for services they may not use often, but for which they are billed monthly, the report said. While these may not be more than $15 per month, more than one can add up quickly, especially when those costs are viewed annually – in the hundreds of dollars – as opposed to "just $30 a month" and the like.

In addition, when young workers get paid every two weeks, rather than on two specific days of a month, there will be two additional paychecks that come in because the year has 26 payment periods, the report said. With this in mind, taking the several hundred dollars in each of these checks and putting them into a savings account, rather than putting them toward other monthly expenses, can likewise build a down payment more quickly.

Other steps to take
Another potentially crucial tool is an automatic savings plan that deducts a certain percentage of every deposit and puts it into a savings account rather than checking, according to Branch Banking and Trust. Even siphoning off 5 percent of salary can add up quickly over the course of the year and is unlikely to be missed in any single month.

Of course, any savings efforts in this regard will necessarily require would-be buyers to figure out how much they will need to spend to buy in their desired region, according to Money Under 30. Generally speaking, if monthly housing costs would exceed 28 percent of take-home pay, that is considered an unaffordable mortgage payment, and experts advise there shouldn't be much wiggle room here, just in case a financial emergency crops up.

Moreover, it's important to keep in mind that 28 percent shouldn't just be for mortgage payments, but also property taxes, mortgage insurance and other basic homeowner costs. Once that figure has been determined, it becomes much easier to calculate what constitutes an affordable home and down payment amount.

When buyers are able to get into the market with higher credit scores and better down payments, they should try to complete an affordable sale as quickly as possible. With rates and prices alike on the rise, today's still-high affordability isn't likely to linger much longer.

For more information about this article, call 866-614-5959.

Tips for paying off credit card debt

Tips for paying off credit card debt

Millions of Americans carry some amount of credit card debt – often in the thousands of dollars – that can hinder them financially. This may be especially true when it comes to preparing to buy a home, because sizable credit card payments can both hold them back from saving as much money as they might need, and simultaneously damage their credit scores.

With this in mind, it's a good idea for consumers to understand how to pay down their credit card balances and keep debt away for the long term. The best place to start is to determine which card has the highest interest rates and start paying that down first, according to Bank of America. However, another strategy in this regard can be to pay down the card with the smallest balance first, then put the leftover money toward paying down the next-smallest balance, and so on.

By law, credit card companies are required to apply all payments above the minimum on the bill toward the principal balance, rather than any interest payments, the report said. As a consequence, paying more than the minimum is a must for reducing debt.

Being strategic
Once it has been determined which accounts to pay down first, second, third, etc., it's vital for consumers to put together a plan of attack, according to Credit.com. That means crunching the numbers and determining whether it saves more in the long run to pay down the account with the highest rate or lowest balance, and then how much can be devoted to each account to expedite the process of reducing those balances to zero.

Meanwhile, it should go without saying that consumers need to stop paying for anything with their cards so that they're not counteracting all the positive work they're doing to get out in front of their debt problems, the report said. That may be particularly problematic if consumers have gotten used to spending beyond their means simply because they have a credit card, so a holistic look at income and expenses may be a good idea at this time as well.

Knowing what to avoid
In addition, it's wise for consumers to know which bad debt-repayment strategies they have been undertaking, so they can curtail them as soon as possible, according to The Washington Post. Often, people will split their payments between all their cards somewhat evenly, with little consideration for how much the practice is actually costing them, and the difference can add up quickly.

For instance, in an average household with just two credit cards, the difference between optimal payment strategies and distributing payments evenly costs those consumers about $90 per year, the report said. For the average household with five different credit cards, that added expense totaled nearly $330. And those in the top 10 percent of debt-carriers ended up paying more than $1,000 per year in charges they otherwise shouldn't have needed to face.

When consumers are looking to buy a home, they must first get all other aspects of their financial houses in order. In doing so, they will be able to get their scores and their savings accounts in better shape in much shorter order.

For more information about this article, call 866-614-5959.

What you should know about closing costs

What to expect from closing costs

When a buyer and seller sign a purchase and sale agreement, the seller takes the home off the market and the closing process begins. Closing on a home takes around fifty days to complete, and has certain costs that accompany it. Depending on what negotiations took place at the time of the purchase and sale agreement, the buyer or seller is going to have to cover these expenses.

Closing Costs
A wide range of professionals are needed to complete the necessary tasks to close on a home. It is typical for the buyer to pay for the majority of them, while the seller only has to pay for a few.

The total closing costs for a home are listed on the closing disclosure form. This is a universal, five-page document a buyer receives from the lender. It lists the total closing costs for the home on the first page and provides a detailed list of each cost on the following four.

Zillow estimates that buyers can typically expect to spend about 3 percent to 5 percent of the home's value on closing costs. These payments cover expenses for inspections, lawyers, mortgage fees, insurance premiums, title charges and more.

The seller traditionally only pays the commission of the buyer's and seller's agents, pest inspections, and sometimes the loan origination fee, according to Zillow.

How to save
There are various ways buyers can try to save money on closing costs. The same way a person might look for the cheapest mechanic to fix their car, buyers can find inexpensive closing service providers. The Consumer Financial Protection Bureau notes that buyers can shop for mortgage closing services other than the ones listed from the lender on the loan estimate. Buyers can use more economical providers so long as the lender agrees to work with them.

Buyers also don't necessarily have to cover all of the closing costs. Redfin recommends that buyers negotiate with the seller to see if they would be willing to pay for some of the expenses. If the seller agrees, they can choose to pay for certain items, or simply contribute a certain amount of money to the buyer.

Closing costs are a necessary part of the mortgage process. Without the help of service providers, the buyer and seller would be unable to complete their transaction and turn over possession of the home. Have questions about closing costs, the closing processes or homeownership in general? Contact CapWest Mortgage.

Home prices are predicted to rise through 2018

Home prices to rise through 2018: What buyers need to know

Housing prices grew steadily through 2017, and experts predict that trend to continue through 2018. These rising home prices have important implications for buyers looking to purchase a new home.

Lower supply of houses
A recent study released by Zillow anticipates a rise in housing prices steadily into 2022. The study, which involved polling over 100 economists and real estate experts, found that respondents on average felt home values would gain 4.8 percent through 2018 and 3.7 percent through 2019.

Lawrence Yun, Chief Economist for The National Association of Realtors, believes steady growth through 2018 after a strong 2017 could leave homebuyers digging deeper into their pockets to buy a new home due to a low supply of houses available in the market.

"A majority of the country saw an upswing in buyer interest at the end of last year, which ultimately ended up putting even more strain on inventory levels and prices," he said.

According to Yun, there aren't enough homes available to keep up with the demand: "The shortage of new homes being built over the past decade is really burdening local markets and making homebuying less affordable."

Strategies to buy a home in a competitive environment
Redfin anticipates this spring to be highly competitive due to the lack of housing inventory. That means buyers can expect more bidding wars than usual, and will need to be hungry and prepared if they want to win their ideal home.

Redfin compiled data from their real estate agents and discovered that three tactics work best when trying to win out an auction on a home. They found that an all-cash offer can improve the likelihood of success by 97 percent, a waived financing contingency by 58 percent, and a personal cover letter by 52 percent. 

Other strategies that can help homebuyers in competitive markets are getting pre-approved, finding an experienced agent, and renting the house back to the sellers.

Another option for buyers is to wait for the housing market to cool down and purchase their home when sales begin to slow. 

A competitive market won't stop buyers from getting a home that works for them. However, they should be ready to spend more money than they thought with home prices on the rise. They should also be prepared for a longer buying process if they intend on achieving homeownership this spring.

Questions about how a competitive market and high home prices might affect you in your homebuying? Contact CapWest Mortgage.

Buyers should consider taking a more strategic approach to the home search and adopting some of the tried-and-true techniques for navigating a seller's market.

House hunting this spring? Use these homebuying strategies

House hunters intending to test the market this spring should prepare for adverse conditions. Home availability remains incredibly low, according to research from Trulia. Nationwide, housing stock dropped more than 10 percent last year. While the descent is expected to slow over the course of 2018 as builders play catch-up, overall inventory levels are likely to remain low for some time. Consequently, buyers searching for properties during the hot spring selling will likely encounter high prices and considerable competition, the National Association of Realtors reported. With this in mind, homebuyers must take a more strategic approach to the home search and adopt some tried-and-true techniques for navigating a seller's market.

Here are some of those buyer-approved methodologies:

Prepare finances ahead of time
This may seem like an obvious tactic, but a surprising percentage of buyers commence house hunts without taking the time to get their finances in order. In fact, the first step buyers across all generations take in the homebuying process is searching for listings online, researchers from the NAR discovered. While there is some merit to such an approach, setting an affordability threshold, looking into financing options and applying for preapproval should come first, according to U.S. News and World Report. This way, buyers can dive headlong into their searches and beat out less prepared challengers who struggle to provide proof of funds.

Embrace in-person shopping
According to the NAR, an estimated 95 percent of homebuyers now search for properties online – and for good reason. Web listings accelerate and streamline the purchasing process. However, some buyers are overly reliant on these resources. In some cases, this leads them to make snap judgments and pass by homes that could potentially work. Sometimes, buyers skew to the opposite extreme and submit private information – including bank account numbers and other financial data – through online portals in an effort to lock down seemingly ideal properties. This can open them up to identity thieves and scammers, the NAR reported. For these reasons, homebuyers should balance follow up in-person with sellers and spend time searching for homes the old-fashioned way: on foot.

Make a strong initial offer
Most people searching for a new home tend to subscribe to traditional negotiation techniques, which tell them to submit initial bids below asking. Unfortunately, this strategy does not often pave the way for success in a seller's market. Due to demand, owners can easily pass over buyers attempting to low-ball them knowing multiple house hunters with higher offers, many above asking, wait in the wings. This means homebuyers looking to purchase property this spring must start with strong offers that at least meet the listing price. While this methodology may preclude any sort of bargaining centered on the home itself, buyers can save money elsewhere. For example, many young homebuyers have begun negotiating real estate agent commissions in an effort to cut costs, according to analysts at Redfin. Such a strategy allows them to obtain new home in a crowded market while still saving some money.   

For more information about this article, call 866-614-5959.

How often should I refinance my mortgage?

How often should I refinance my mortgage?

Refinancing is something first-time homeowners in particular may not know how to approach, but which can often seem like a good idea. After all, if they've built up significant equity or mortgage rates are more affordable now than when they locked in their current rate, this can be a great idea. But how frequently should homeowners pursue such an option, and what makes it the right time to refinance?

There is no single catch-all point at which it's a good idea to refinance, as the circumstances surrounding any homeowner's financial situation can vary widely. However, there are a few basic guidelines that could help them determine whether it's the right time for them, according to NerdWallet. While owners are technically allowed to refinance any time they like, doing so too frequently probably isn't a good idea. That's because it costs thousands of dollars to refinance, and therefore takes time for owners to recoup those costs.

"A homeowner can refinance their mortgage as many times as they would like, but they should establish objectives and find a product that meets their unique financial situation," Ray Rodriguez, a regional mortgage sales manager for a lender in New York City, told the site. "For example, a shorter term loan will have a lower interest rate than a 30-year fixed-rate loan, but the payment will be higher because you're paying it off faster."

With that in mind, it's probably a good idea to do plenty of homework before pursuing a refinance, to find the best available options.

What to consider
Among the factors owners need to consider about a refinance are the size of the closing costs and whether, if they're reducing their loan terms, they may be hit with a penalty for paying off their balances early, according to Credit.com. Moreover, they will need to monitor mortgage rates – especially as they rise in today's economy – to determine if refinancing will make a loan more affordable over time.

Generally speaking, experts say it's wise to refinance if owners can cut their mortgage rates by half a percentage point – for instance, from 4.25 percent from 4.75 percent, the report said. However, there's a little flexibility there depending upon a number of other factors, so it's wise to crunch the numbers before making a decision.

Be prepared to shop around
Finally, it's also important for homeowners who are thinking about refinancing to explore all their options – not only with their current mortgage lenders, but with others as well, according to Financial Samurai. The ability to shop around for the best available deal is a little easier for refinancers, because the mortgage standards lenders will apply to them are a little looser than those for buyers.

When buyers have the ability to carefully examine their options and determine the point at which they make up the money they spent to refinance in the first place, they're likely to find the best deals. Therefore, a little homework can go a long way toward helping people save money any time they want to refinance their existing home loans.

For more information about this article, call 866-614-5959.

Is it time to invest in a security system for your new home?

Is it time to invest in a security system for your new home?

If you've recently purchased your first home, you're probably familiar with the popular home security systems in your area, if for no other reason than the sales associates keep knocking on your door. With the many statistics being thrown your way (did you know, according to the FBI, one burglary happens every 18.2 seconds?), you may find yourself asking if a home security system is worth the high cost.

Here are some points to consider before making that decision:

Deter Criminals 

We've all heard that security systems deter criminals, but is that true? Based on a study done by the Alarm Industry Research and Educational Foundation, 83 percent of burglars would look for signs of an alarm system before entering a home and 60 percent of those would find another target if a security system was present. In fact, many neighborhoods are now advocating for residents to invest in exterior security cameras to deter criminals in the area. In addition to traditional home security systems, you can now purchase smart video surveillance products provided by companies like Arlo or Canary. Both companies offer video cameras that are easy to install, work from wi-fi, and integrate with an app on your phone so you can be your own personal response team. 

Homeowner's Insurance Discounts

Home security systems can be expensive, but you may be able to recoup some of that cost through insurance discounts. Large insurance companies like State Farm offer discounts on certain home security systems to offset the initial cost of setup and installation. However, the big savings comes after a system is installed. Many insurance companies offer 10-15 percent off your insurance costs after it's been determined that your home has adequate safety features including a security system, video cameras, hefty door locks and visible window locks. To see if a security system would qualify you for insurance discounts, contact your insurance representative directly. 

Neighborhood Crime Statistics 

Every neighborhood is different and the rate of crime in your surrounding area may impact your decision to purchase a home security system. Although it's always beneficial to know your neighbors, relying on anecdotal evidence isn't always the most accurate way to determine crime rates in your neighborhood. Instead, check out a website like NeighborhoodScout.com, which allows you to view all crime information in your area based on reported incidents. If your new home is located in an area with a high number of burglaries, a security system may help mitigate that risk. 

That being said, a burglary only needs to happen once to hurt you financially. The most important factor when deciding if it's time to invest in a home security system is if you're willing to take that chance.