Friday, August 31, 2012

5 Emotional Mistakes Made By Homebuyers - cont.

Mistake No. 4: Equating 'short sale' with 'deal'

In real estate, a deal is a deal, and the terms "short sale" and "real estate owned," or "REO," are  marketing buzzwords designed to lure bargain-hungry buyers.
All too often buyers run into the trap of buying a foreclosure or short sale thinking they are buying way below market value, when they are really overpaying.
A good deal is a matter of the property's historic price, current market conditions and the home's features, as well as the buyer's own needs. Weighing all the factors isn't easy. But buyers dramatically decrease their chances of making emotional mistakes by working with professionals who know the local market.
The biggest mistake is that buyers not using Realtors that know the local market. Trying to find a home on your own is very difficult if you're not familiar with the market on a micro level. (Buyers working alone) may feel like they are receiving a deal, however, they do not get to see all inventory in the price range desired.

Thursday, August 30, 2012

5 Emotional Mistakes Made By Homebuyers - cont.

Mistake No. 3- Overpaying for Perfection

Every buyer wants the perfect home, but unfortunately it may not exist. That is a concern when homebuyers insist they've found the perfect home and are eager to make an offer.
On the remote chance that a buyer does find perfection, the emotional attachment will sometimes become so high that the buyer will overpay or overextend themselves financially.
And even if the home is perfect and the buyer isn't overpaying, the owner could have difficulty selling.
A 100 percent match for one person may be a complete disaster to the majority of the population, and a buyer must consider an exit strategy from the beginning to avoid losing money when they sell. There is definite value over time for the enjoyment and use of the home, but that number is slight when compared to the total investment.

Wednesday, August 29, 2012

5 Emotional Mistakes Made By Homebuyers - cont.

Mistake No. 2: Falling in love at first sight

With real estate, there should be no such thing as love at first sight. Here is a simple rule for homebuyers.
Many buyers will look at no less than five properties before we sign any contracts. It's easy to fall in love right away. (But) jumping on the first or second home that a buyer looks at will often result in buyer's remorse, overpaying and the inability to sell at a reasonable price down the line.
Infatuated buyers who leap at a property tend to overlook the value of the process itself -- from inspection to appraisal.
Buyers can make the mistake of falling in love with a property after a first visit (but) before they do their necessary due diligence. Love-struck buyers sometimes waive key conditions in a rush to make an offer. Sometimes those overlooked details end up sinking the deal down the road.

Tuesday, August 28, 2012

5 Emotional Mistakes Made By Homebuyers

Real estate agents say emotional mistakes are common among homebuyers, who sometimes let good deals pass them by. Or worse, buyers overpay for their "dream homes" because they let feelings cloud their judgment.
But buyers shouldn't beat themselves up for getting emotional. Buying a home is often the biggest purchase a person will make. Homebuyers "need someone in their corner who can counsel them and make sure they are making a smart investment, not an emotionally driven purchase," according to Nest Seekers International.
Buyers should be aware of emotional mistakes many of their peers make. Here are five common errors, with advice on how to avoid making them.

Mistake No. 1: Always looking for a better deal

Every market has its up and downs, but today's market has conditioned homebuyers to make the mistake of thinking there's always a better deal just around the corner. While it's true prices could drop further (and mortgage rates might decline), it's not a good idea for buyers to play the odds now.
Even in the best of markets, we cannot predict what will happen tomorrow. I can't promise you that a bigger, less-expensive home will not come on the market the day after you close on this one. Market fluctuations are always part of real estate transactions.
Be smart, do your homework, know the value of the area and the home you are buying, and be sure it meets your family's needs.

Monday, August 27, 2012

Is now really the best time to buy? - conclusion

Housing market snapshot
Just how low have mortgage rates plunged? In the week that ended July 26, the average rate on a 30-year fixed-rate loan was 3.49%, according to Freddie Mac survey data. Sound low? It should. The rate on that same loan was an average of 4.55% last July. As previously mentioned, tight housing supply helped constrain home sales in June. U.S. existing-home sales declined to 4.37 million in June, down 5.4% from 4.62 million in May. However, that pace is still 4.5% higher than the 4.18 million sold in June of last year.
“Despite the frictions related to obtaining mortgages, buyer interest remains solid,” says Lawrence Yun, the NAR’s chief economist. “But inventory continues to shrink, and that is limiting buying opportunities. That in turn is pushing up prices in many markets,” as is a reduced supply of lower-priced distressed listings. Prices increased the most in the West – 13.3% year over year – due to short supply of affordable and mid-tier homes.

Nationwide, the median existing-home price was $189,400, up 7.9% from June 2011.  June marked the fourth back-to-back increase in monthly home values.

What to do when a seller misleads you
Buying Advice received a question recently from a Pennsylvania reader who discovered a huge mold problem in the attic of a home he had purchased. It's a problem he says was covered up by an unscrupulous agent who had purchased the property to flip.

This appraiser had discovered that the home had a huge mold problem in the attic. It had been reported to the previous owner’s insurance company in a weather-damage claim, but was ultimately shot down when it was found to be the result of a poorly built addition.

“My question is: I am concerned I am stuck with this problem and now my family is having serious health problems. I feel like I was sort of misled and not fully informed by the real-estate agent investor … He actually had the attic entrance crawl space covered with drywall where I did not even know there was an attic to inspect."

The key question is whether the agent/investor who sold the home knew about the problem. If he did, he had the legal responsibility to disclose this information to the buyer in writing. In fact, he is doubly responsible, she says, because most state laws — including Pennsylvania’s — require this disclosure both between property sellers and buyers and between selling agents and buyers.

Of course, sellers don’t necessarily know everything about their homes, and they aren't expected to disclose what they don't know. But, in this case, the agent drywalled over the attic entrance, so he not only knew about it but took steps to conceal it.
The buyer/current owner should hire a lawyer and sue the seller. The claim would be that the seller failed to disclose something that should have been disclosed and possibly committed fraud by keeping the buyer from discovering the mold independently.
It is recommended that the reader file a complaint with the state agency regulating real-estate agents. Just the threat of having his real-estate license revoked may prod the seller to compensate the current owner. Mold problems such as this one illustrate the need for a good home inspection with every purchase. It’s not clear in this case, however, if an inspection was conducted or if the inspector didn’t find the problem, as inspectors aren’t necessarily expected to look behind walls.
It’s not clear whether an inspector could be at fault for missing the problem - that depends on several factors, including local standards.

Sunday, August 26, 2012

Is now really the best time to buy?

Is now really the best time to buy? (© Steve McAlister/Getty Images)
With mortgage rates at or near record lows and prices rolled back to where they were a decade ago, this summer would seem an ideal time for first-time buyers to finally take the plunge. The problem is there aren’t a lot of starter homes on which to bid.
An inventory shortage has whipped up a feeding frenzy in some housing markets, with bidding wars and price increases. Is this pressure justified? Would most buyers be better served by waiting?
Let us take a look at what’s driving the shortage and how that picture is likely to change in the months ahead.  Where does “Act now!” make sense, and where should buyers sit it out awhile?

Buy or wait?
It’s a great time to buy a home – if you can find one. The inventory of existing for-sale homes declined nearly 25% in the U.S. from the same time a year ago, after a prolonged slowdown in foreclosure processing and continued holdout from sellers, many of whom can’t afford to sell because of negative equity.
The shortage helped inflate the price of existing homes by 7.9% in June from the same period a year earlier, according to the National Association of Realtors. This made some buyers believe that if they don’t buy now, they might be priced out.
That might be true – but only for a small fraction of buyers in certain markets or highly coveted neighborhoods, experts say. It doesn’t appear that given the forecast for the next 12 months that most buyers have a lot of reason to hurry.
Many economists predict a choppy recovery in the latter part of this year, with a sluggish economy dampening sales and prices. Winzer, for one, does not predict meaningful price increases (think 4% to 5%) until 2014. Indeed, he says, in some markets in Florida and elsewhere, the recovery hasn’t even begun in earnest.
With foreclosure starts beginning to resume and some sellers getting off the fence after seeing price upticks, there might be more homes to choose from later in the year or next spring. More choices could mean less bidding pressure from other home shoppers.
In a handful of markets, however, Winzer says buyers would be justified in acting, as strong employment growth is likely to keep demand and prices strong. The markets that LMM pegs as having the brightest and most stable year ahead are:
  • Austin, Texas
  • Houston-Sugarland-Baytown, Texas
  • Boulder, Colo.
  • Fort Collins-Loveland, Colo.
  • Washington, D.C./Arlington-Alexandria, Va.
  • Lubbock, Texas
  • Clarksville, Tenn.
In these markets, which have strong economies and unemployment as low as 5%, buyers should at least start looking now, because prices could rise as much as 4% next year – maybe even a bit more, because Winzer says his forecast is a bit conservative. Shockingly low mortgage rates are another good reason for buyers in these markets to get moving.

Saturday, August 25, 2012

Mortgage rates are rising

30 year fixed rate mortgage – 3 month trendMortgage rates inched up this week as investors were warned that the United States may slide into recession in 2013 if Congress doesn't get its act together.
30 year fixed rate mortgage – 3 month trend
The benchmark 30-year fixed-rate mortgage rose to 3.91 percent from 3.86 percent, according to the national survey of large lenders. The mortgages in this week's survey had an average total of 0.45 discount and origination points. One year ago, the mortgage index stood at 4.41 percent; four weeks ago, it was 3.75 percent.
The benchmark 15-year fixed-rate mortgage rose to 3.12 percent from 3.05 percent. The benchmark 5/1 adjustable-rate mortgage fell to 2.9 from 2.93 percent.
Rates jumped off record lows about a month ago and have been rising since then. The recent spikes serve as a reminder to borrowers that the low rates won't last forever.

Weekly national mortgage survey

Results of's Aug. 22, 2012, weekly national survey of large lenders and the effect on monthly payments for a $165,000 loan:
 30-year fixed15-year fixed5-year ARM
This week's rate:3.91%3.12%2.9%
Change from last week:+0.05+0.07-0.03
Monthly payment:$779.20$1,149.01$686.78
Change from last week:+$4.72+$5.58-$2.65

Overall, rates have increased about a quarter of a percentage point in recent weeks.

Friday, August 24, 2012

Mortgages lifted due to hints of positive news in the real estate market

30 year fixed rate mortgage – 3 month trendMortgage rates rose this week as some positive economic data in the United States eased investors' worries.

30 year fixed rate mortgage – 3 month trend
The benchmark 30-year fixed-rate mortgage rose to 3.86 percent from 3.81 percent, according to the national survey of large lenders. The mortgages in this week's survey had an average total of 0.42 discount and origination points. One year ago, the mortgage index stood at 4.45 percent; four weeks ago, it was 3.78 percent.
The benchmark 15-year fixed-rate mortgage rose to 3.05 percent from 3 percent. The benchmark 5/1 adjustable-rate mortgage rose to 2.93 from 2.91 percent.

Weekly national mortgage survey

Results of's Aug. 15, 2012, weekly national survey of large lenders and the effect on monthly payments for a $165,000 loan:

30-year fixed15-year fixed5-year ARM
This week's rate:3.86%3.05%2.93%
Change from last week:+0.05+0.05+0.02
Monthly payment:$774.48$1,143.43$689.43
Change from last week:+$4.71+$3.97+$1.77
Rates have been on the rise for three weeks in Bankrate's survey, but mortgage analysts say the upward trend won't last long.

Consumers help lift the economy and rates

One of the factors that helped push rates up this week was the release of a better-than-expected U.S. retail sales report that showed improvement in consumer spending for the first time in four months.
The Commerce Department says retail sales rose 0.8 percent in July, compared to the previous month. That's much better than economists had expected after sales had declined for three months in a row, including a 0.7 percent drop in June. Consumer spending is considered a key economic indicator because it accounts for more than 70 percent of U.S. economic activity.
When those types of numbers come out, the stock market seems to do well and that's not good for rates, according to Americana Mortgage in Manhasset, N.Y.
That's because when investors become more confident about the economy, there's less demand for safe investments such as U.S. Treasury and mortgage bonds. The trend normally results in higher bond yields, which translates into higher mortgage rates.
Adding to the optimism, the National Association of Home Builders said Wednesday that builder confidence increased for a fourth consecutive month in August, according to survey conducted by the association.

Thursday, August 23, 2012

Will biweekly mortgage payments save you money?

Question: You refinanced two years ago and received an offer to pay biweekly instead of monthly.  Will this help to reduce my mortgage more so than with monthly payments? If so, how and where can you apply?

Answer: Making biweekly payments on your mortgage will absolutely cut your interest cost and shorten the term of your loan, to boot. Such an arrangement usually is set up as an automatic debit from an account you specify. The mortgage lender will sweep through that account every two weeks and collect exactly half of your required monthly payment.

How does it work?
While there are only 12 months per year, there are 26 two-week periods. This means you are essentially making 13 monthly payments per year. In today's market, this can save you a bundle, especially if you start counting from the first monthly payment, because it reduces the term of a 30-year loan to about 25 years.

How much are the savings?
On a $200,000 mortgage at 5%, you'll cut the total term by just about five years, while shaving off more than $34,000 in interest cost. Biweekly payments can be valuable, but there's no magic to them. In fact, if you are responsible and dedicated, you can simply send in an extra monthly payment once per year and achieve nearly the same savings. The biweekly plan just makes it happen automatically.
That said, you should check the fine print. While it's OK for a lender to charge you a one-time setup fee, watch out for any recurring transaction fees that could diminish your savings over time.
Use a mortgage calculator to see how you can save money with biweekly mortgage (or other) prepayments.

Wednesday, August 22, 2012

The new subprime – 1 out of 6 FHA insured loans is now delinquent.

Perfectly timed, the Federal Housing Administration (FHA) is starting to see significant delinquencies at a time when the housing market nationwide is appearing to recover.  If you define “subprime” as the lowest quality mortgages on a totem pole, FHA insured loans now take that place.  It should not come as a surprise given the FHA is insuring an insane 30x leverage market with many that are diving in with only 3.5 percent down.  This is no surprise and even this summer, the FHA to assist in shoring up their dwindling capital base jacked up their mortgage insurance premiums.  The FHA has completely deviated from their mission and is simply another method of over extending debt strapped and income restricted Americans into homes that they clearly cannot afford.  What was once a tiny echo is now becoming a larger siren of impending financial issues.  The FHA is heading directly into a bailout scenario.

FHA is the new subprime
Some astounding information is coming out regarding the deterioration of FHA insured loans:
“(Reuters)- Fitch Ratings sees a growing divergence between 90-day past due delinquency patterns for guaranteed and nonguaranteed loans as a potentially troubling signal of future losses. This may eventually force the FHA to look for opportunities to put back some defaulted loans to the banks, particularly if the agency’s funding status worsens and U.S. home prices fail to rebound quickly.”
What stood out in the report is that eight of the largest US banks now have $79.4 billion in delinquent FHA insured loans.  Of this, 83 percent represent government-guaranteed mortgages.  If you need additional proof of this maximum leverage nonsense and that banks are willing to give loans out to a homeless person if they could offload the risk to the American taxpayer, read this:
“While delinquency rates for nonguaranteed loans have been improving steadily at these institutions, the trend for FHA-guaranteed loans is starkly different.”
In other words, banks are cautious when their money is at stake but when it comes to government backed loans they are willing to make any kind of loan product so long as they get their cut.  This is very similar to the entire Alt-A MBS process where banks bundled crap loans together and distributed their toxic waste around the globe deceiving investors.  Now why is this a problem?  Because FHA has essentially stepped in as the low-rung mortgage option:

Tuesday, August 14, 2012

Is a short-term mortgage right for you?- cont.

When shorter terms work

No single solution works for everyone. A man in his late 30s, has lowered his interest rate by 1.75% by refinancing four times in less than four years. In his recent refinance, he chose a 30-year term after briefly considering a shorter mortgage. But this client is all about the cash flow. The idea of throwing too much toward the principal doesn’t make sense right now. He isn't about paying it off 30 years from now. The home, great as it is … will be something they've sold off or converted to a rental property at that point.
The client's new 3.75% rate also includes his loan fees. That cost him about a quarter of a percentage point, or $30 to $40 more a month.
Another client refinanced out of a 30-year mortgage and into a 10-year fixed term at 3% — while lowering his monthly payments. Reducing the loan term and the monthly payment is "pretty rare,". But this homeowner had some advantages: He had been paying off the loan for 12 years, and his rate dropped from 6.5% to 3%. Also, years of payments had shrunk his mortgage balance enough so he could borrow considerably less money this time.
For him, a 10-year term "was a no-brainer.". Also, the man is in his 60s, and retiring with a paid-off home is important to him. He has plenty of cash, so lowering his monthly payment through a 30-year term doesn't matter as much as it might to someone else.
A third recent client who chose a five-year mortgage for his refinance. What's more, the man wanted an interest-only, adjustable-rate mortgage, a loan that many consider risky. The rate is reset periodically, and it can rise. Also, paying only interest never gets you any closer to owning your home outright.
Interest-only mortgages were sold aggressively to lower-income borrowers by some lenders during the bubble. That led to defaults when the escalating payments grew beyond what homeowners could afford.
Before that, however, short-term interest-only loans were marketed primarily to high-income homeowners as a sophisticated financial tactic. Because these loans' interest rates are cheap, at least initially, wealthy borrowers can use the savings to earn a better return on their money elsewhere — a rental property, business investment or annuity, for example.

Monday, August 13, 2012

Is a short-term mortgage right for you?

  • Own your home outright faster. You'll be free of mortgage payments sooner, too. You still must pay taxes and insurance, though.
  • Save on interest. The savings are potentially massive. A certified financial planner in Southfield, Mich., says that she and her husband will save a whopping $128,190 in interest if they keep the new mortgage with its 3.375% interest rate for the entire 15 years.
  • Equity builds faster. It was noticeable right off the bat, especially to individuals who see equity piling up quicker on their monthly mortgage statements. Even if some sell their home before the new mortgage is paid, they'll pocket more cash from the sale than they would have with the old mortgage.
For example, if the you had borrowed $200,000 over 30 years at 5.25% and sold your home in the 10th year of the loan, you would have accumulated $38,424 in equity from your payments. But by borrowing the same amount over 15 years at their new rate of 3.375%, you'll have roughly $129,000 in equity after 10 years.

  • You may not qualify. You'll need a strong mortgage application to satisfy lenders, and your home's appraisal must be high enough to support your loan request. That could be a problem if you have low or negative equity.
  • Your payment may grow. Depending on the fees, the size and term of your loan, and the difference between your old and new interest rates, your new monthly payment is likely to be higher, maybe much higher. Or it could remain the same. The Joys' payment grew from $900 a month to $1,250.
  • It's expensive. Fees of $5,000 or more could wipe out any benefit to refinancing. These charges may include an appraisal fee, inspection fee, private mortgage insurance, prepaid interest, application fee, loan origination fee, homeowners insurance, and points and fees imposed by the Federal Housing Administration or other government lending programs. The Federal Reserve's Consumer Guide to Mortgage Settlement Costs explains mortgage fees and estimates costs.
  • The paperwork is a headache. Lenders may demand a lot of documents, from tax statements to old divorce papers. It can seem invasive.
  • It takes months. Lenders are so busy now, and their lending requirements are so strict, that it can take months to get a loan approved. TD Bank, for example, averages 51 days to process a refinance from the time the application is submitted, according to TD Bank. That's relatively quick. Some banks can take as long as 120 days. When choosing a lender, ask several about their turnaround times.

Sunday, August 12, 2012

5 Scams to Avoid in the Summertime - conclusion

The vacation rental scam

It's every traveler's worst nightmare: finding a great deal online for a vacation rental only to discover, upon arrival, that the address doesn't exist. Or the keys don't work. Or the telephone number for the person that took your deposit is suddenly out of service. But according to Elizabeth Walling, Internet crime analyst at the National White Collar Crime Center, nearly 8,000 rental-related complaints were reported to the center between June 2011 and June 2012, including vacation rental scams.
When you think you have found the perfect rental, at the perfect time with the perfect price, you want to jump at the opportunity, according to the National White Collar Crime Center. Scammers rely on the impulsiveness of the vacation renter.
Avoid it: Before paying, do your homework. Run a search on the rental address or rental description. If the same (property) is for rent in San Francisco, Calif., and Savannah, Ga., you have a scam on your hands. Also, search the name of the individual or business providing the rental. If they've pulled the scam before, someone might have complained on a scam-busters site, giving you the chance to walk away.

Saturday, August 11, 2012

5 Scams to Avoid in the Summertime - cont.

The job offer scam

With national unemployment rates still high, countless new graduates will spend this summer sweating over online employment ads. Unfortunately, such ads can be rife with scams. According to the BBB, scams are most prevalent on Craigslist or other free job listing sites, but email phishing work-from-home cons are also widespread.
I've seen some very slick operations. They look and feel totally legitimate. The more crafty scammers have professional-looking websites and sometimes conduct lengthy telephone interviews, after which they "hire" you. Then the true scam begins.
Bogus businesses usually ask for money upfront for reasonable-sounding purposes, such as to run a credit or background check. Alternatively, they might require you to complete online forms "for the HR department" that ask for information like your birth date, Social Security number or mother's maiden name. Of course, they're really asking for everything needed for identify theft.
Avoid it: Never divulge personal information without ensuring the company and the offer are legitimate. Thoroughly research the company's reputation and stay alert to red flags during the interview process. Anytime someone wants an advance fee, or says you'll make 'big money,' you want to be suspect.

Friday, August 10, 2012

5 Scams to Avoid in the Summertime - cont.

The moving man scamSummer is the most popular time of year to move, which can make finding a quality moving company tough. But if you're considering hiring an off-the-books mover, you'd better reconsider.
Remember: You're hiring people to enter your home, take your belongings, put them in a padlocked van and drive away according to the American Moving & Storage Association. If these movers don't have a record of trustworthiness, "it's not always going to work out well for you."
A common scam among rogue movers is the hostage situation. After packing your possessions, these movers will refuse to unload the truck unless you pay extra, saying the price has increased because your belongings weighed more than anticipated. The police can't help. They'll say it's a contractual dispute. The mover may then store your property, at your expense, until the dispute is resolved.
Avoid it: For interstate moves, hire movers who are members of AMSA's ProMover program, recommends Bisney. The AMSA rigorously examines the business practices of each ProMover candidate, and only admits a business to the program if it has been deemed to have excellent and ethical business standards. In addition, it must sign an agreement pledging to uphold the AMSA's code of ethics and bylaws.
If a ProMover isn't available, then at least confirm the mover is properly licensed by the Department of Transportation. For intrastate moves, check the mover's reputation through the BBB or your state's moving association.

Thursday, August 9, 2012

5 Scams to Avoid in the Summertime - cont.

Here's the scenario: Grandpa gets an email from his grandkid, who claims to have been mugged while on vacation and desperately needs money. The details seem right, so Grandpa wires the money -- to an imposter who has hacked the grandkid's email account and lifted facts about the kid's life from social media. People put so much information about themselves on social media, it's scary. Scammers use this information to make cons more realistic.
While older people are often targeted in these scams, anyone can fall victim. An anonymous person's email was hacked a few years ago, friends received a message saying she had lost her wallet and passport during a trip to the U.K. and needed money. The letter was so convincing even my own sister believed it.  Because (the scammer) had also stolen the contacts through Facebook, he knew some information about people who sent back questions like 'Tell me how you know me. Several friends wound up losing money.
Avoid it: Never announce your vacation plans on social media. Moreover, if you receive an email purportedly from a stranded friend, don't send money without first speaking directly to your chum.

Wednesday, August 8, 2012

5 Scams to Avoid in the Summertime

Summertime conjures up daydreams of beach holidays, lazy picnics and firing up the barbecue grill. Don't get too distracted, though: Summertime scammers are busy dreaming up schemes as well. According to Katherine Hutt of the Council of Better Business Bureaus, or BBB, certain swindles are more prevalent in summer months than any other time of the year.
Summertime seems to offer scammers a lot of opportunities to catch us out of our routine. It's best to keep your eye out for red flags and stay vigilant, even when you're trying to relax.

To keep from getting burned, steer clear of these five scams.

The Home Improvement Scam

The ravages of winter or rains of spring can leave your house looking worse for wear -- a fact not lost on home improvement scammers. During summer, it's common for homeowners to be approached by a contractor who will point out property damage and offer to repair it. Often they'll say they can give you a good price because they've got materials left over from another job.
But many of these workers who appear out of nowhere only do cosmetic repairs. All too often people complain of driveways being painted black instead of being asphalted as promised. Other scams involve the "contractor" loosening shingles on your roof to create damage. And some swindlers simply take your deposit and run.
Avoid it: Be wary of anyone offering unsolicited home improvement services. Be picky, ask questions and make sure the worker has insurance. Also, take the time to check the worker's BBB report and don't yield to high-pressure tactics.
People tend to be less cautious about hiring workers for outside the home. But any time you allow someone access to your property, you should know exactly with whom you're dealing.

Tuesday, August 7, 2012

August home-maintenance checklist - conclusion

Get a furnace inspection
Have your heating system inspected and serviced by a professional. Call the company that sold it to you or your fuel distributor to get recommendations for servicers.

Blanket the water heater
Get one of those nice, fat insulating blankets for your water heater if it doesn’t have one. You don’t want to pay to heat all that water and then let the heat leak into the atmosphere.

Inspect and maintain the water heater
Have your water heater professionally serviced once a year. (Keep track with this furnace maintenance record from the University of Alaska Fairbanks Cooperative Extension Service.) Inspect the water heater thoroughly and check the walls and floor around it for evidence of leaks, rust or corrosion. Also check the lines and connections to the heater. Even a small amount of moisture can rot the flooring and subfloor. Lie on the floor to look at the bottom of the heater from underneath, using a flashlight. If you find leaks, replace the water heater.

Test the water-heater valve
Test the valve that controls temperature and pressure on tank-type water heaters. Do this once a year because, if the valve becomes stuck in the on or off position, an explosion can result. Work carefully because the water in the tank is extremely hot. Do it during business hours on a weekday so you can get help if you find problems. Put a bucket under the water heater’s overflow pipe to catch the drainage. The valve is at the top of the water heater and is recognizable because it has a small handle. Lift the test handle for five seconds to release a little water, then close it. If the valve refuses to close, or if nothing comes out, call a plumber immediately to replace it. (See an illustration and detailed instructions in this pamphlet by the Washington state Department of Labor and Industries.)

Monday, August 6, 2012

August home-maintenance checklist - cont.

Fix leaky faucets
Check faucets for leaks and install new rubber gaskets by unscrewing the faucet end, removing the old gasket and reassembling it. Also fix dripping faucets. First, shut off the water under the sink. For sinks with independent hot and cold water faucets, dismantle each faucet, removing the washers (rings made of rubber, plastic or brass). Put the washers in a sandwich bag and bring them to the hardware store to look for replacements. Reassemble the faucets and turn the water back on. For a single-arm faucet, fix leaks by replacing the faucet’s inner workings. That’s not hard, because you can just note the brand and buy a faucet rebuild kit (about $50 at hardware stores). Dismantle the faucet, laying out the pieces on a paper towel. Shoot a photo or make a sketch to refer to when assembling it. Put the faucet back together and turn the water back on.

Clean and replace grout and caulk
Inspect the grout in tiled areas of your home, particularly in bathrooms and the kitchen. If grout is cracked or missing, remove and replace it in the affected areas. Grout should be cleaned regularly, particularly if it comes into contact with moisture, to keep it free from stains and mold. Use an old toothbrush and one of these cleaning products: TSP, hydrogen peroxide, vinegar, bleach or grout cleaning solutions (available at tile stores or on the Internet). Inspect the seal around sinks, showers and tubs and recaulk any spots where caulk has cracked or separated. Use silicone tub and tile caulk.

Sunday, August 5, 2012

August home-maintenance checklist - cont.

Clean sink drains

If you’ve got a slow-draining sink, take action. First, try a homemade drain cleaner. recommends mixing a solution of equal parts of salt, baking soda and vinegar. Pour it into the drain and chase it down with two quarts of boiling water. You can use this solution monthly. Avoid chemical drain cleaners; they can damage the pipes and create toxic exposure for you and your family.

Or you can apply some elbow grease and fix slow drains by cleaning out the drain and trap  – the U-shaped pipe that’s directly under the sink. Position a bucket under the trap to catch falling water and gunk and keep a pile of rags at hand for cleaning up. This can be a messy job – you may also want to wear rubber gloves.
Loosen and remove the couplings that hold the trap to the straight pipes that run from the sink and to the sewer. You may need to use a plumber’s wrench. If the pipe is plugged, all kinds of messy stuff will fall into the bucket and must be removed from the trap. If possible, take the trap outside and shoot a stream of water from the hose through it. Rinse it out thoroughly. Use a snake or wire from a coat hanger to remove built-up debris from the pipes.

Also, pull out the sink’s drain plug to clean it. The plug pops up and down in the sink. It is attached to a rod and lever that are held to the back of the drain pipe by a nut. Pull out the rod by unscrewing the nut. Clean the drain plug and remove any gunk that’s in the pipe, then reassemble the plug. Reassemble the trap, tightening the couplings by hand so you don’t screw them too tight. Flush the drain by running hot water for a few minutes. 

Saturday, August 4, 2012

August home-maintenance checklist - cont.

Pamper the lawn

Homeowners can’t successfully emulate the tightly trimmed golf-course look because they don’t have a golf course’s budget and army of maintenance professionals. Instead, the best thing you can do to achieve a good-looking lawn is to mow frequently and high (three inches or more – or just set your mower blades as high as they’ll go). This discourages weeds and trains the grass to grow in thickly. High, frequent cutting encourages roots to grow deep and retain water, so you’ll need to water less frequently. Let the clippings fall onto the lawn to add nourishment.

If you’ve been watering the lawn this summer, keep it up: Water infrequently but deeply, giving it an inch to an inch and a half of water each time (measure by putting an empty tuna can on the lawn). Water early in the day to avoid evaporation — not at night, which invites disease. You’ll know it’s time to water when your footprints don’t spring back when you walk across the grass, when the grass gets a blue tinge or when you can’t easily push a screwdriver or steel rod into the soil.
If your lawn has turned brown, don’t try to rescue it by watering now. That’s hard on the grass plants and a waste of water. It’ll come back when the rain starts in the fall.

The best time to fertilize depends on your climate and the grass type in your lawn. In general, avoid fertilizing during extremely hot weather or periods of drought. Do not use products with nitrogen when your lawn isn’t green – it can encourage weeds. Start thinking about fertilizing at the end of this month and consult professionals who sell lawn-care products or call your local home-extension service (Wikipedia links to state cooperative extension services here) to get advice on what to use and exactly when to use it. August is the perfect time to root dandelions out of the lawn using a long-handled forked tool or with judicious use of an herbicide.

Friday, August 3, 2012

August home-maintenance checklist

Fend off pests outdoors, pamper lawns, keep drains flowing, clean grout and maintain water heaters this month.
August home-maintenance checklist (© Image Source/Getty Images)There are many reasons – fire protection, air circulation, drainage, attractiveness and safety — to keep the outside walls of your home clear and free of debris. One more compelling reason is that piles and stacks of tools, lumber, ladders, yard waste and toys create a haven for spiders, rats, mice and wood-boring insects. Take an hour to circle your home outside, removing anything touching the siding. Donate, discard or store what you’ve removed. (Bing: How much do pest control services cost?)
Firewood is one common hiding place. Stacking it under the eaves of the house keeps it dry, but there’s a price: The wood creates a home for spiders and invites them into the house. Also, wood piles trap moisture against the siding and prevent circulation. If left long enough, the dampness could rot siding or trim. Instead, store firewood at least two feet from the house and 18 inches above the ground. Keep it dry by building a little shelter over the top of the pile.
In addition, discourage pests by clearing out vegetation under decks that might give them a safe place to hide. And pick fruit from trees as soon as it is ripe. Keep the ground clean under fruit and nut trees.

Seal garbage cans tightly. If you’ve had problems with rats, dogs or raccoons getting into the trash, make sure the cans have tight-fitting lids. Tighten the lids by linking a stretchy tie-down from handle to handle. Knot it to shorten it if necessary. Buy or build a small enclosure for your cans.

Wash and rinse items you intend to recycle. Keep them waiting for disposal indoors or in a sealed enclosure. If you store pet food in a garage or carport, keep it in containers with tight lids. (Read “Three tips for keeping your home rodent-free.”) Also, if your bird feeder is attracting rats, get rid of it. To see if you’ve got “four-legged birds,” shine a light on the feeder in the middle of the night or in the wee hours of the morning.

Don’t let water sit around your yard or garden; it breeds mosquitoes. Change the birdbath and wading pool water at least weekly. Toss water out of pet dishes, flowerpot saucers, cans, buckets and anything else lying around that collects rain. Keep gutters clean.

Thursday, August 2, 2012

Cash-saving tips that pay big bucks - cont.

Raise the deductibles

The average individual annually spends $4,704 on health insurance premiums, according to the Kaiser Foundation; $1,954 is spent on car insurance premiums, according to RateWatch auto insurance; and $804 is spent on homeowners insurance, reports the Insurance Information Institute. That's $621.83 per month on insurance premiums alone.  Smart spenders can sidestep some of those premiums by raising their deductibles.How much you save is going to vary from policy to policy, but it does pay to go back and see where you can trim some fat.

What it's worth: According to, raising your homeowners insurance deductible from $250 to $1,000 can save you a sweet 25 percent. That's $201 alone. Assuming that raising your deductible could lower your other two insurance bills by a modest 10 percent, consumers can save $866.80 per year on average.
  • A one-time deposit of $866.80 grows to $2,392.
  • Annual deposits add up to $21,782 in 15 years.

Time the vacations

Saving money means scouting hot vacation deals.For example, Nicaragua, the whole trip -- airfare and tours -- only cost  $500 each. That's what happens when you vacation somewhere cheap in the off-season.
On top of saving on airfare, those who leave their hometown when nobody else does can also save anywhere from 20 to 50 percent off hotels and tourist activities. Combine that savings with discounts from online promotional codes, and consumers can travel much cheaper this year.
What it's worth: A study conducted by Visa shows that the average consumer plans to blow $1,654 per person on their summer vacation. Flip that vacation from summer to winter, factor one-fourth off hotel, airfare and entertainment, and that $1,654 drops down to a $1,241 vacation budget, for a $413 savings.
  • A one-time deposit of $413 grows to $1,139.
  • Annual deposits of $413 add up to $10,378.


The art of haggling is alive and well. Staunch advocates of negotiating for good bargains, say that you can get breaks on everything from plumbing to preschool simply by asking.It especially works if it's a local vendor that operates on reputation or you've been a loyal customer. Even if you were to miss two (credit card) payments and you are good and loyal customers, they often waive any fees.
What it's worth: You can't put a number on this one. You might be able to save an extra $360 per year on preschool bills, but amateur hagglers may not be so lucky. While there's no guarantee that haggling will pay off, it couldn't hurt."

Wednesday, August 1, 2012

Cash-saving tips that pay big bucks - cont.

Communicate cheaply

Always look for ways to maximize savings, such as cutting the phone bill. After switching from a local phone service to Vonage last year, one person pocketed an extra $240, or $20 per month. Thanks to broadband Internet phone systems like Vonage and Skype -- a service that allows free member-to-member calls and long distance for a penny per minute -- thrifty consumers can all but forget about footing landline bills.What it's worth: Households that eliminate a landline and stick with cell phone plans can cut $30 per month out of their utilities budget, and those who trade cell phones for broadband phone systems can save even more. Shove $40 per month, or $480 at the end of the year, in a tax-favored savings plan for 15 years, and here's what happens:
  • A one-time deposit of $480 grows to $1,324.
  • Annual deposits of $480 add up to $12,062.

Weatherize the house

Your kid's college fund could be flying out the window. Consumers save 3 percent on their heating bill for every degree they turn down the thermostat. They also lose money by not replacing the weather stripping around their windows, washing clothes in hot water and not insulating pipes around their water heater.What it's worth: It depends on location. In states with moderate weather year round, tightening the insulation screws may have little effect. For those living in more extreme climates, simple steps like installing heating and air conditioning timers can save hundreds. According to a study by the Energy Information Administration -- the U.S. government's official source for energy statistics -- the average household spent $1,137 last winter in heat alone. Lowering the thermostat just 5 degrees in winter means reducing costs by 15 percent, or saving $170.55 after one season.
  • A one-time deposit of $170.55 grows to $471.
  • Annual deposits add up to $4,286 in 15 years.