The Care and Keeping of a House

tools for blog - pixabayCongratulations! You’ve closed on your home. Whether your home is turn key ready or needs some improvements, it’s key to educate yourself about home maintenance. With some curiosity, time and elbow grease, you can save some money and keep your house in good working order for years to come. Become familiar with these easy maintenance and safety items, and you’ll be well on your way to becoming a knowledgeable owner!

  1. Maintain your smoke and carbon monoxide detectors. When you first move into your home, test all of the smoke and carbon monoxide detectors to make sure they are in working order. Batteries for smoke detectors should be tested monthly and replaced annually. Carbon monoxide detectors should be tested and, if needed, given fresh batteries twice a year. A handy way to remember to do your routine checks and battery replacements is to do it when daylight savings begins and ends (“spring forward” and “fall back”).
  2. Document your home’s layout. Once your house is set up, take photos of each room. This will provide a record of the conditions of your home in case of flood, fire, theft, or other damages or disasters. Make sure to keep all your mortgage documents and key insurance policies in a safe deposit box at a bank or in a fire proof safe or lockbox at your home.
  3. Make a preventative maintenance schedule. To keep your home in tip-top shape and help retain its value, make sure that you stick to recommended maintenance schedules, especially for your key systems. Heating systems should be inspected annually by a qualified professional, and septic tanks should be pumped every two years. Make sure to check any water or air filtration systems periodically as well. Doing preventative cosmetic improvements, like staining decks or giving trim a fresh coat of paint, will help you keep your curb appeal.
  4. Make affordable energy upgrades. If you move into your home during the warmer months, take advantage of the good weather to make energy upgrades for the colder months ahead. Simple things like re-caulking drafty windows and installing a programmable thermostat can save you cash over time. Keep an eye out for bare water pipes as well. Covering hot water pipes with a layer of pipe insulation can cut down on the energy and cost of heating up your water.
  5. Address hazardous materials. If you move into a home built before 1978, and if it has not been renovated, there is a chance you could encounter lead paint. If lead paint is in good condition it is not a hazard, but chipping paint should be addressed, especially if your household has young children. Lead paint can also be problematic in doorframes and windows, since friction can produce fine lead paint dust. Click here for more information about lead paint hazards and their removal. Radon is also common in New Hampshire. It’s naturally occurring and can be present in both your home’s air and water. Make sure to have a radon test done and install the needed systems to mitigate it if high levels are found.

Ready to take the next DIY step? Search for DIY blogs and YouTube videos related to your desired project to brush up on your skills, or check out books at your local library. Remember, when in doubt or when looking at a large job, hire a professional contractor!

Don’t Overlook These Details When You Close on a Home

Photo courtesy of Pixabay

Photo courtesy of Pixabay

You’ve pinched your pennies, qualified for a loan, survived the search for a home, and are finally ready to reach the closing table. Time to seal the deal and toast your new home, right? Don’t jump ahead quite yet. Closing on a home involves some details that, when done right, will make sure you can fully enjoy those first days rather than worry about whether or not you missed something. Make sure to check these items off your to-do list:

  • Transfer utilities. It’s a simple thing that can be easy to overlook until the last minute. Check this item off early, ideally a month before you close. Call the utility companies and notify them so you can make proper arrangements to have all utilities in your name as of the closing date.
  • Request a copy of your HUD1 Settlement Statement Form or Closing Disclosure. The HUD1 Settlement Statement Form outlines all fees for the closing and who owes what money to whom. You can request a final copy from your closing agent 24 hours prior to closing. Note that in the near future, the HUD1 Settlement Statement Form will be replaced with a Closing Disclosure, and by law you will receive a copy of it three days before closing. If you receive a Closing Disclosure, compare it to the Loan Estimate you received at the time or your loan application. This will give you time to review the fees and ask questions.
  • Take a final walk-through. If you’ve done your homework, you have already had a full inspection and negotiated about any issues found. But when closing day comes, it’s worthwhile to take one final walk-through to make sure you haven’t overlooked anything, that any items that were agreed to stay with the house are there and in good condition, and that any agreed-upon work was completed to your satisfaction.
  • Have a little financial cushion. Don’t let under-budgeting make your closing day more stressful than it needs to be. The list of fees and expenses a buyer typically pays include the lender’s attorney fees, recording fees, escrowed taxes, homeowners insurance, and points or fees that the lender charges to issue the loan. Make sure you have enough money in the bank to cover the total dollar amount as given by your closing or title agent, plus a little extra so you have some cushion to cover unforeseen costs. If there are unexpected fees or charges that you don’t understand, ask plenty of questions and get the clarifications you need before signing and agreeing to pay.
  • Read, read, read. There will be a lot of paperwork. It’s tempting to assume that since you’ve been discussing everything with your lender and real estate professional throughout the deal that you’re already aware of everything that could be in the paperwork. Regardless, make sure you take your time to read through what you are signing so you understand it fully. Once you sign, you have agreed to everything contained in the fine print for the life of the mortgage, so you don’t want any accidental surprises.

Remember that as you approach the closing table, you have a team of professionals there to help you through the process. Don’t be afraid to ask questions of your lender or real estate professional before the big day, and when you are at the closing table don’t hesitate to ask questions of the closing or title agent too. Once the deal is done, congrats—you’re officially a homeowner!

Have more questions about homeownership? Visit www.GoNewHampshireHousing.com.

What is Private Mortgage Insurance?

FAQ - pixabayIf you’ve been looking at buying a home, you probably have heard the letters “MI” or “PMI” tossed around. MI or PMI refers to private mortgage insurance, which you most likely will have to pay if you don’t have a 20% downpayment when purchasing your home with a conventional mortgage. Already lost? Don’t worry—here are some frequently asked questions about conventional financing PMI to help you understand what it is, why it’s part of your mortgage payment, and ways to possibly reduce it.

Why do I have to pay PMI?

PMI protects your lender in case you do not pay your mortgage. Today, it’s almost always required if you are putting less than 20% down on a home. It’s important to note that this is different than other, additional types of insurance you can purchase for your home, such as homeowner’s insurance or flood insurance.

How do I go about paying it?

Your PMI payments are typically built into your monthly mortgage payment. You may have heard of the acronym PITI when people talk about mortgage payments. This stands for Payment, Interest, Taxes and Insurance. PMI is part of the “I” in this acronym.

How long do I have to pay it?

Typically, PMI is automatically cancelled once you have paid off 22% of the value of your home. In general, you must be current in making your payments for automatic cancellation to apply. In some cases, you may be able to request cancellation of your mortgage insurance if you have reached 20% equity and meet certain criteria. Before you close on your loan, ask your lender about restrictions or exceptions to requesting cancellation of your mortgage insurance. If you have questions about the cancellation of your mortgage insurance or if you think you meet the criteria, contact your servicer.

Is there a way to reduce it or avoid it entirely?

One way to avoid PMI is by saving up for a 20% downpayment. If 20% is beyond reach, it’s still worth amassing as much as you can—generally, the more you put down on your home, the lower your premium. Another option is New Hampshire Housing’s conventional mortgage programs, which offer low or even no private mortgage insurance.

If a large downpayment is a significant barrier, remember that a conventional loan isn’t your only option. Government insured mortgages like FHA, VA, and USDA-Rural Development loans can offer lower downpayments than conventional mortgages (it is important to know, however, that with FHA loans you pay a mortgage insurance premium, or MIP).

Still baffled about how PMI factors into your mortgage? Talk to a housing counseling agency, or an even better option is to sign up for one of their homebuyer education classes. Understanding as much as you can about PMI before you close on a loan is important to fully understanding your financial obligations as a homeowner.

Trimming the Financial Fat

dollars - pixabayJanuary is when we are bombarded with fitness and diet ads, and gyms are suddenly packed with people looking to trim down and tone up. Tending to your health is important, but the start of the New Year is also a perfect time to tend to your financial health. Here are some tips to get a fresh start, trim financial fat, and prepare your wallet for a financially healthy 2015.

  • Check your credit report. You are entitled to a free credit report from each of the three credit reporting agencies once a year, and you can request them through www.annualcreditreport.com. Looking at your report won’t give you your score, but the report does provide the base for your score. Checking it gives you the opportunity to spot errors and catch instances of fraud. If you find errors, it is your responsibility to contact the credit reporting companies to have them fixed.
  • Check your subscriptions and memberships. Examine your cable, streaming, and magazine subscriptions. Have any gone up in cost unexpectedly? Are you really reading the magazines you get in the mail and fully utilizing your streaming services? If you don’t watch most of the cable channels you are paying for and that stack of magazines is collecting dust, it may be time to cut back. Also, think about scaling back on any health club or other memberships that you are not utilizing.
  • Start a financial journal. Keep a small notebook in a handy location, whether that be in your car, your purse, or on the kitchen counter, so you remember to write down what you spend. For a techy alternative, you could set up a spreadsheet or use an app like Mint to keep track. Do this for at least one full month so you have a complete picture of where your money is really going—what you see may surprise you!
  • Get in touch with your wants vs. your needs. Be mindful about what you are spending, and re-establish what you truly need this year versus what are just wants. Perhaps you have a financial goal in mind, like buying a home or taking a family trip, that will require some extra discipline with your dollars. Writing down your financial needs and goals and posting them in a visible place is a great way to set your focus for the year.
  • Conquer your credit cards. If you are carrying credit card debt into the New Year, resolve to pay it down, especially if you have a high interest rate. Make more than the minimum payment whenever possible so you avoid paying just interest and not making a dent in your principle. Avoid relying on cards to pay your daily bills and instead trim extra costs so you have the funds to meet your living expenses. Avoid opening and closing cards often.
  • Pick one of your financial pitfalls and do a month-long “cleanse.” Maybe you make a daily coffee run, eat out more than you would like, or spontaneously drop money on department store “deals.” We all have those little financial blind spots that can add up. Trying quitting yours for a month and see how much you can save. For some visual motivation, put whatever cash you would have spent on that habit in a jar to see the savings add up. Take the process one step further and put whatever cash is in that jar toward your financial goal for 2015. After a month of foregoing your spending habit, you might find you don’t miss it!
  • Resolve to learn. If you are not used to watching or managing your finances, it can seem overwhelming. Knowledge is power! Find a fun financial blog or app to keep you up to date, sign up for a financial education class (check with local banks and credit unions or a HUD-Approved Housing Counseling Agency), and give your brain a workout by learning something new. The financial know-how you gain will only help your future.

Have you made financial resolutions for 2015, or are you trying out new money habits? Share your tips and tricks in the comments.

Struggling with Your Mortgage? Take These Steps Now.

If you are falling behind on your mortgage, the first thing you should know is that you are not alone. There are free resources available to help you. Taking the following steps will help you determine your options, find support, and begin addressing your situation.

Photo credit: Colleen Lane, Flickr (Creative Commons)

Photo credit: Colleen Lane, Flickr (Creative Commons)

  1. Do not ignore the problem. The farther behind you fall on your payments, the more difficult it will be to bring your mortgage current and the fewer options you may have. If you receive mail from your servicer, do not throw it away or ignore it, as it can contain important information about upcoming legal actions as well as helpful foreclosure prevention information.
  2. Contact a housing counselor. Through HomeHelpNH, the state’s foreclosure prevention initiative, you can access a free, qualified, independent housing counselor near you. To be connected to a counselor, simply dial 2-1-1 toll-free (assistance is available 24 hours a day, 7 days a week) or fill out this online form (if your situation is urgent, it is recommend you call so you can receive immediate help). Counselors can assist with filling out paperwork, determining your time constraints, objectively assessing your needs, and informing you about available options.
  3. Beware of scams. There are people and companies that may offer to buy your house for cash, provide legal help at high cost, or offer “too good to be true” solutions. Beware of these offers. If you are unsure about an offer you receive, discuss with a housing counselor whether it is a legitimate option or just a scam.
  4. Prioritize your spending. Carefully review your finances, and identify areas where you can cut spending. Optional expenses, such as cable TV, entertainment, and memberships, should be eliminated so you can prioritize keeping your house and making your mortgage payment. You may even want to delay payments on things like credit cards or other unsecured debt until your mortgage is paid. Talk to a housing counselor about prioritizing debt payments and creating a short-term, emergency savings and spending plan.
  5. Take action. Taking steps like actively seeking housing counseling, reading your loan documents to familiarize yourself with your rights, asking questions, and carefully reviewing any documents you may need to sign is vital. Quick action can make a significant difference in what types of options may be available to help your situation.

For more information about foreclosure prevention and available resources, visit the HomeHelpNH website. If your situation is urgent and requires immediate help, dial 2-1-1 to find a housing counseling agency near you.