Don’t Make These Mistakes When Buying Your First Home

It is an exciting time when you are shopping for your first home. You start dreaming of all the things you’d like to have in a house and viewing online tours. It’s okay for your head to be in the clouds as long as your feet are planted firmly on the ground. Dream about the perfect home, but be careful that you don’t make these rookie mistakes.

1. Skipping Pre-approval
Before you start house-hunting, take the time to find out how much you will be approved for. It will give you a budget to work with and save time later when you find the perfect home. If you do the pre-approval process after you find a home, you may end up losing it to someone who is already pre-approved.

There is a difference between getting pre-approved and pre-qualified. With pre-qualification, you have given basic information to the lender so they can determine how much you can qualify for. However, you are not guaranteed to get that amount. With pre-approval, the lender goes through the entire process and guarantees you a loan for a certain period of time.

2. Not Knowing What You Can Afford
You may have been approved for a certain amount, however, to be able to afford those mortgage payments you must sit down with your budget and figure how much money you need to allocate each month. If you are already paying rent, you know you can pay at least that much. But if you want a bigger house, or one that’s in an expensive neighborhood, your mortgage payments can be more than your current rent. Don’t get locked into a loan without knowing where the money is coming from.

3. Not Knowing the Value of the House
A seller may owe a certain amount on a house or expect a certain sale price, but it may not be the right price in today’s economy. House values have fallen in the last few years and will take some time to rise again. Don’t end up paying more for a house than it is worth; you may run into problems if you decide to sell.

4. Not Getting the Right Inspector
Don’t get so excited about a house that you skip the inspection or choose a cheap inspector to do the work. Even beautiful homes can have unseen damages or expensive problems which may need repair. Mold often hides in hard-to-find remote areas, and structural damage can take years to affect the part of the house you see.

Not all problems mean that you should back away from the home. What it does mean is that you should try to negotiate a lower price or have the seller fix these problems. You don’t want to end up hating a house that looked so good in the beginning.

For many people, buying a home is a dream. Don’t let it become a nightmare by making these costly mistakes. Take the time to learn about the buying process and stay a step ahead.

Is The Housing Market in Recovery?

You hear news every week about the housing market, and while some of it sounds promising, other reports aren’t as positive. So, how do you know if the housing market is recovering? There are several indicators that experts use and you can, too.

Don’t Look at Prices

Housing prices are not the first indicator of a recovery; rather, they are often one of the late signs. The first sign is increased house sales. People won’t buy if they are worried about income or a job. If they are looking to buy a house, it shows they have confidence in their job security, their income, and the economy as a whole.

Prices will increase as the demand for houses increases; this is the law of supply and demand. The drop in house prices may be depressing, but it isn’t a true indicator of the state of the real estate market.

According to a Bloomberg survey, housing sales increased in 2011 (compared to 2010), and February of 2012 promises to have the highest number of sales in 1 month in the last 2 years.

Inventory

Another indicator of the state of the housing market is how much inventory is available, or the months’ supply. It is an estimate of how long it would take to sell all of the homes that are available today, at the current rate of home sales. Right now, the inventory is at 6.6 months, meaning it would take about six and half months to get rid of all of the homes on sale in the market right now. This number is actually considered healthy because it shows a good balance between buyers and sellers.

Other Indicators

You can look at statistics that have nothing to do with the housing market directly, but will, to some degree, have an impact on it. For instance, as unemployment rates drop, it indicates a steadily improving economy. As more people get jobs, they will begin to look at their housing situation. Once they feel secure in their career, they will be ready to commit to a mortgage and start looking for a house.

Reduced Foreclosures

As the foreclosure rates drop, fewer homes are coming back on the market. The homes that are for sale are from owners who have been making their payments and are ready to sell. Potential buyers also feel more secure about entering the housing market if they hear improvements. A high rate of foreclosure makes people hesitant to look for a mortgage. It takes some time for buyers to regain their confidence in mortgage companies and banks.

If you wait for housing prices to increase before you feel safe about purchasing a home, you may be waiting a few years. But if you are willing to look at other indicators, you might decide that now is the perfect time to start investigating the possibilities. You can get in on the beginning of the recovery while home prices are at their most affordable.

5 iPad Apps to Help You Design and Redesign Your Home

One of the world’s most popular computer devices, the Apple iPad is a versatile tool that can inspire you as you decorate your home. In the AppStore you can find many applications that help you explore new interior design ideas and trends.

Houzz Interior Design Ideas
This app was featured in the Wall Street Journal and TechCrunch. It offers its users the largest idea database with over 70,000 photos and 150,000 idea books. The app also allows you to store photos locally, so you don’t have to be connected to the Internet every time you want to view your idea. The app makes it easy to connect with local contractors and architects to turn your dream designs into reality. Instead of clipping photos from design magazines, you can simply grab photos and ideas you like and compile them into your digital ideabook. With your ideabook on the iPad, you can easily show contractors or designers exactly what you’re looking to do for your next home improvement project.

Cost: Free

Home Interiors Ideas HD
Another top pick, this app was selected by Apple as one of their “New and Noteworthy” apps. Organized and expansive, it features ideas and designs in six major categories, including living room, bedroom, bathroom, kitchen & dining rooms, house pool & Jacuzzi, and Japanese home interior. With high definition photographs you can view close-up details of rooms and decorating ideas. The app has a virtual interior museum experience where you can take virtual tours of interior designs from all over the world. Other popular features of the app include a bookmark function and a button for sharing favorite designs. Because the app already stores all its content, you don’t need an Internet connection to browse and discover new possibilities for your home.

Cost: $1.99

Phaidon Design Classics
For those who want a comprehensive collection of classic designs, the new Phaidon app for iPad offers its three-volume design history encyclopedia. With access to 1,000 design classics by renowned designers, you can be inspired from history as you brainstorm ideas for your next project. The application features archival photographs, original sketches, prototypes, and more from famous designers. This is an essential resource for those who love design and design history.

Cost: $28.99

Autodesk Sketchbook Pro
If you are the type of person who always sketches out the latest idea for your home, welcome to the new pencil and paper. With this app you can transform your iPad into a sketchbook. Whether you’re a creative professional or an amateur designer, this app can help you communicate your design ideas visually with drawing and painting tools. The app boasts a natural sketching experience with pencils, pens, markers, brushes, layers, and blending tools.

Cost: $4.99

Pulse News Reader
To stay on top of the latest trends in design and interior decoration the Pulse News Reader app is an essential. The news reader comes with a curated Design section, but it also allows you to personalize your news feed so you can view topics from your favorite design sites daily. The app itself has an intuitive design that makes it easy to use and visually attractive.

Cost: Free

Hot Housing Design Trends for Spring

With rising temperatures and longer hours of sunlight, it’s time to put those heavy winter colors and textures back in the closet. Warm sunshine and new plant growth calls for a fresh spring look. Get inspired by the following cheery new trends for home design.

Color in the Kitchen
Color is one of the easiest ways to add a fresh, new look to your home. A blue tile backsplash in your kitchen adds a Mediterranean atmosphere, with bright blue reminiscent of the sea. Choose a mint makeover to bring zen-like calm in a cottage kitchen. For a fun spring vibe, paint everything, including the floors, cabinets, and ceiling, a clean white. Then, add pink accents for the curtains, light fixtures, wall art, and large appliances, like the refrigerator. Other bright color trends in the kitchen are citron or gold colors. The yellow hues make for a stylish, retro feel with a homey atmosphere.

Neutrals with a Splash
Every five or seven years there seems to be an overhaul in design trends. This spring, designers are seeing a greater presence of neutral tones combined with bright accents. Creams, dark browns, and grays allow bold furnishings or bright accents to vividly dramatize rooms. Citron, lime, tangerine, and yellow are the best pairings with gray and other neutral shades. All shades of gray from charcoal to pale gray are versatile for rooms with either contemporary or traditional interior design. The grays serve as the perfect back drop for paintings and for energizing accents and furnishings. Patterns and prints have fallen out of favor this spring, but colors like red-orange or tangerine combined with earthy neutrals are hugely popular. Valances, throws, floral arrangements, and pillows with bright, spring colors are easy to find and replace, reviving your home from its winter doldrums.

Color of the Year
The latest color crush in spring design is Tangerine Tango. As the 2012 Color of the Year, this red-orange color instantly energizes a room. You can paint one wall in a room tangerine to make the rest of the room’s features stand out. Creamy-orange wallpaper paired with red-orange pillows and throws can bring out the various shades and moods of orange. If you’re looking for easy ways to enliven your living room, rearrange your books according to color, placing tangerine spines near bright blue spines to add contrast and visual punch. An easy way to spruce up your patio for spring is to add a tangerine painted rug. To contrast the tangerine color, pair it with steely blue or indigo for a more dramatic effect. Because the juicy tangerine was a popular shade in the 1960s and 70s, it’s easy to find chairs and accent pieces in the color at vintage stores and thrift shops.

From Outdoors to Indoors
Take a few hints from nature as your redecorate your home this spring. Replace heavy fabric curtains with light, airy ones. Sheer white or lacy curtains stream in the sunlight, bathing your whole house in soft natural lighting. Swap out your old, dull rugs with new ones that feature floral prints to bring botanical life into your home. Indoor plants like African violets and begonias have stunning flowers and foliage in the spring. Other low maintenance house plants are peace lily, spider plant, and snake plant.

Interest Rates Reach Record Lows

At the beginning of February, Freddie Mac reported that mortgage interest rates reached record lows. Now, according to data from their newest weekly survey, those interest rates continue to drop.

Fixed Rates
The 15-year-fixed mortgage rate fell to its lowest level in 60 years, currently averaging 3.13%. The 30-year-fixed-rate at 3.88% was just a whisker away from its all-time low of 3.87%. Since October, 30-year-fixed mortgages have not exceeded 4%. Last year, for 30-year-fixed mortgages, interest rates stayed just below 5%. For the past 18 weeks, the rates have remained nearly 1% lower than the average of last year’s rates. At this time last year, the 15-year-fixed mortgage rate averaged 4.15%, a full 1.2% higher than the current rate.

Adjustable Rates
Average initial rates on 5-year adjustable rate mortgages (ARMs) were at 2.81%, just a tick above the record low reached a few weeks ago, 2.80%. The average last year for 5-year adjustable mortgages was 3.73%. With an adjustable mortgage, lenders are guaranteed a steady margin while borrowers may face changes in their payments over time.

Low Rates & The Economy
The low rates may be due to some of the recent economic developments both domestic and abroad. Here in the U.S., the unemployment rate is slowly decreasing which means the U.S. job market is strengthening. In February over 200,000 jobs were added to the economy. China’s growth into an industrial engine also contributes to the favorable market conditions. Finally, in Greece a debt exchange with private bondholders removes a default of sovereign debt from the table. With positive signs in the economy and historically low interest rates, housing sales should increase.

Sluggish Housing Market Despite Low Rates
These interest rates have been hovering at or around the record lows for quite some time. The unusually stable mortgage rates combined with rock-bottom housing prices means housing is more affordable than it has been in nearly two decades. Freddie Mac’s chief economist Frank Nothaft stated that typical families have more than double what is needed to purchase median-priced homes.

Despite these favorable conditions, consumer demand for homes remains sluggish. Uncertainty in the housing market and the economy in general is certainly responsible for the lack of enthusiasm. Even with plenty of income, low interest rates and affordable houses, potential buyers aren’t willing to commit to such a huge financial obligation as a home purchase.

Another possible factor to the lag in housing demand is more stringent credit demands. With some mortgage financiers requiring a 20% down payment on the purchase price of a home, many young consumers who otherwise qualify aren’t able to obtain a loan. These younger consumers are turning to the Federal Housing Administration (FHA). With as little as 3.5% down, potential homebuyers can obtain an FHA loan. The insurance costs associated with these federal loans, however, increases the mortgage interest rate.

Parents: The New Mortgage Lenders

According to a survey from Better Homes and Gardens Real Estate, 68 percent of people expect to provide financial support to their children or grandchildren to make homeownership possible for them. Since the housing bubble burst in the late 2000s, there has been a growing trend in parent-assisted home ownership. Three factors can determine if a family is financially ready to invest in real estate. The parent’s finances, the child’s finances, and the actual real estate deal, all these factors need to be systematically outlined before signing onto a huge financial obligation.

For parents, it’s important to consider the future first. If retirement is on the horizon, parents should prepare for their financial future and budget accordingly. If a large sum for a house payment or loan will not be a financial burden on the parents, then it could be an opportunity to help boost their child’s finances. Additionally, should the parents loan their child money for a down payment, they need to make sure they can afford to take over mortgage payments if their child cannot. It would be unwise to help finance your child’s home if you will not be able to pick up their mortgage payments should something unexpected happen. Beyond money, parents can assist their kids with house purchases by giving the gift of knowledge. Ensure that the kids know the risks involved with investing in a home. There can be unforeseen repairs, replacement of vital electrical or plumbing systems, and more.

HOW TO LEND TO YOUR KIDS:
Cash – A cash donation is the simplest way to assist with the down payment. The most an individual can give to another, without incurring taxes, is $13,000. Cash can be the best way to help finance your kid’s home because most young people have not yet had the chance to save for a long period of time. They are in need of a large sum of money to make the down payment, which can range from 10-20 percent of the price of the home. The larger the initial down payment, the smaller the mortgage payments. For a young person, a large upfront payment can relieve some of the financial burden later.

Rent-to-own, lease-to-own – Many parents use a rent-to-own arrangement (also called lease-to-own) when helping their kids with their first home purchase. In this setup the parents buy the house by putting down the entire down payment and let the child pay rent to cover mortgage payments. When the child is financially ready, for instance after they’ve found a steady job with regular income, the parents can then sell the property to the kids. For a rent-to-own, it is important to have a written contract with the arrangement details. Parents and kids should also consult with tax professionals and a lender to cover all the risks and details of a rent-to-own agreement.

Loan – Finally, parents can sign or co-sign on a loan for the child’s house purchase. A loan from a parent can be much more lenient than from a bank, allowing the child to pay it off quickly without accruing additional charges in interest. For parents who co-sign on a loan, it’s important to be aware of risks. If the child misses payments or defaults on the loan, the parents may face financial consequences in addition to having to cover the cost of loan payments. In times of crunch, if the adult child has lost a job or needs to buy a new car or home, a loan from a parent can be a successful route to getting the child back on track.

MAKE IT FORMAL
In the face of a large financial decision, no matter which way a parent helps out a child, draw up a contract. If the child mistakes a loan for a gift, unless specifically spelled out, situations could become uncomfortable. With written agreements, parents can avoid messy family squabbles and make planning an estate easy.

Buying a Home Hasn’t Been this Affordable in 20 Years

According to a recent press release from the National Association of Home Builders, housing prices across the nation are at record levels of affordability. In the fourth quarter of 2011, over 75 percent of all houses sold could have been comfortably purchased by families earning the national median income of about $64,000. This news was corroborated by the U.S. Dept. of Housing and Urban Development, who said recently that not since 1971 have houses been so affordable. This buyer’s market in America is due the following factors:

-Decline in home prices
-Lowest interest rates on record
-Rock-bottom mortgage rates

Record Lows
The perfect storm of record low interest rates and decreasing prices may be a once in a lifetime opportunity to purchase a home on a dime. It would seem people are taking note of the advantageous tide. In late 2011, sales of new and existing homes increased 3 percent over the previous months. Housing prices themselves remain lower than they were the year before. The housing market’s recovery, however, is underscored by overly restrictive lending standards. Many who are looking to purchase a home for the first time simply don’t qualify for loans, keeping home ownership just out of reach. Some say these lending standards stifle and may slow recovery of the housing market.

You can afford a home, but can you buy it?
Just because you can afford a new or existing home doesn’t mean you can buy it. While mortgages are cheap, they can be difficult to obtain. Restrictions for loan providers and home builders can be obstacles for many in the housing market. Those lucky ones who do have the credit and collateral needed to obtain a loan will reap the benefits of interest rates that seem to be ever-decreasing.

Locations with the most affordable housing
Located near major underground gas reserves, Youngstown, Ohio, carries the coveted title of the area with the most affordable housing. This former steel town, now on the brink of economic renaissance, is full of bargains on homes. Residents of the town take home an average $54,900 annually, and those whose incomes fall within that median range can afford 91 percent of the houses in the Youngstown metro area.

Other locations with major housing markets and highest affordability percentages include Lakeland, Florida, Modesto, California, Toledo, Ohio, and Harrisburg, Pennsylvania. For smaller housing markets, percentages look even better. In Kokomo, Indiana, over 99 percent of homes were considered affordable with families earning a median income around $59,000.

The best news for potential homebuyers is that market prices aren’t likely to rise anytime soon. Since the recent $26 billion foreclosure settlement, many more foreclosures and repossessions are likely. This will drive down housing prices even further. Moreover, the Federal Reserve has promised to keep interest rates low for at least two years. Because mortgage rates also follow the government agency’s rates, those mortgage rates are also likely to keep at record lows.

7 Easy Ways to Update Your Kitchen

The kitchen is usually the busiest room in the house. Every morning kids wolf down bowls of cereal and parents bustle through for coffee. After school or work, everyone congregates in the kitchen for snacks, or to help prepare dinner. As a hub of everyday activity, it’s important to keep the kitchen lively and fresh. The following are easy ways you can keep your kitchen from becoming out-dated and boring.

Add table lamps – Table lamps provide soft lighting, inviting a warm atmosphere. Pick up some table lamps to put on a counter or a shelf to gently bathe the room in warm light, rather than have bright overhead lights on all the time.

New gadgets and inventions – People are rather genius when it comes to inventing the next must-have kitchen gadget. From coffee mugs with smart lids to juicers, new gadgets can add an extra level of comfort and convenience to your overall kitchen experience.

Painting cabinetry – A simple fresh coat of paint can totally reinvent a kitchen. Painting the insides of the cabinet with a contrasting color can be a striking way to refresh your kitchen. Painting cabinets can be tricky because they have many awkward corners and edges. By planning ahead, you can be sure to have an easy experience refreshing your cabinets.

Suspend pots and pans – Need more storage in your kitchen? Instead of replacing cabinets, install a pot rack to suspend your pots and pans from the ceiling. Pot racks range from $50 to over $100 dollars but they’re definitely more cost effective than remodeling and redoing cabinets, which can cost thousands of dollars.

Indoor herb garden – To add a touch of nature and Mediterranean ambiance to your kitchen, plant fresh herbs in pots. Herbs like mint, cilantro, parsley, and basil do well in a sunny window. For aspiring gourmet cooks, there’s nothing that enhances the flavors of a meal more than fresh herbs. Although herbs grow well indoors, it’s important to be aware of all the potential problems with indoor gardening.

Baskets for storage – If the kitchen is in dire need of more storage, baskets can be a fun way to stow away certain fruits and vegetables. Potatoes, onions, and apples can be stored away easily. Baskets can also be a convenient way to keep cloth napkins, table clothes, and kitchen towels nearby.

Hang mirrors – Designing with mirrors and glass can open up your kitchen. With a mirrored backsplash, light that usually gets trapped in dark corners underneath a stove hood or cabinet, floods out into the room. Mirrors are both a practical and luxurious way to decorate your home.

The above suggestions are really just the tip of the iceberg. What great updates have you done to your kitchen?

Five Ways to Create a Beautiful Lawn

A beautiful lawn is the envy of many homeowners who think it is impossible to have one of their own. It is not as difficult as one would expect if they follow these five simple rules.

1. Know Your Lawn.
Know what kind of grass you have before you attempt to treat it. If you have bare spots and you are trying to grow new grass, find out what is already in the surrounding area, or what will grow well in your type of climate. You can always talk to your local agricultural extension office to find the best grass for your area.

2. Learn How to Mow.
Set your mower to a higher setting. Yes, this will mean you have to mow more often, but it will make your grass healthier, especially during dry times. It also allows the roots to penetrate deeper so they can withstand droughts. Moisture is also held better in taller grass; the grass will retain the water longer when you irrigate your lawn.

Grass also spreads better if it is left taller. You won’t have to plant seeds to help your grass spread to bare spots.

3. Learn How to Water.
Watering your lawn does not have to be as big a chore as you might expect. The best watering method is to water deeply and infrequently. The grass should dry out between watering’s. The exception to this rule is when you have new growth. For new lawns you will need light sprinkling to wet the roots that have not penetrated deep into the ground yet. You do not want to risk washing away the roots before they are established.

4. Learn About Fertilizing.
Fertilization will help ensure a healthy lawn year after year. However, you have to know what kind of fertilizer to use. It is best to fertilize your lawn in the fall, so you have a healthy yard in the spring.

Do not use a fertilizer that contains a large amount of nitrogen. While nitrogen is necessary for a healthy lawn, it can cause your grass to grow fast and be weak. It may also become more susceptible to disease. Never use more than ten percent nitrogen in your fertilizer.

5. Learn About Dethatching.
Dethatching is the process of removing dead grass from your lawn. This may occur as the grass dies in the fall or when you mow. A thin layer of thatch is not a problem, but a thick layer can cause many issues. It can prevent water and nutrients from penetrating into the soil to reach the roots.

The best time to dethatch is mid-spring or early fall. Do not dethatch when weeds are germinating, or they will spread over your lawn. You should remove the thatch when it is over half an inch.

Having a beautiful lawn is not impossible, but it does require some extra care. If you follow these five tips and learn as much as you can about your lawn, you can enjoy the beautiful view for many years to come.

5 Tips for Achieving the Wow Factor When Decorating on a Budget

When you live on a budget, it can be hard to afford a designer room in your home. There are tricks you can use to make your home look like something you would see in a magazine, without the hefty price tag.

1. Don’t be afraid of neutral.
When you want a new design style for your room, it is much easier and cheaper to change out accessories than buy new furniture and carpeting. Neutral can seem boring to some people, but if you use beige and tan on big ticket items, and save your color for small items and paint color, you can easily change your design when it suits you.

2. Redesign what you already own.
See what you have in your home and find a new use for it, or, simply change its look. If you have a piece of furniture that looks outdated, you can paint it a new color. You can also stencil a design on a piece of furniture to make it look fun and trendy.
Take the stencil idea and put it on the wall. You don’t have to do all of the walls; just pick a focal point. Decide on a theme for your room and stencil that design in one area.

3. Spend more money on accessories.
Go cheap on big ticket items, such as the furniture, and spend extra money on small accessories. For instance, buy branded pillows that can make a budget couch look like a designer sofa.

You can also buy a cheaper lamp base and spend more on the lampshade. Include pottery or other collectible items. These are things people notice when they visit your home and they add a professionally designed look to your room.

4. Use your talents to create unique designs.
You don’t have to be a skilled artist to create fun décor items. Hang framed home-made artwork created by your children on your walls. Dress up old ceramics with new paint. Glue lace, fabric, or other notions on an old lampshade and create a one-of-a-kind piece.

It doesn’t take a sewing genius to make pillow covers. Buy some new fabric in a fun color or design and sew it over your old pillows. Not only is this inexpensive, you can choose the fabric that fits your style.

5. Visit used stores for great finds.
Check out flea markets, garage sales, or used furniture stores. Look at what a piece could be, rather than what it looks like now. For instance, you can find items that look like junk but become a stylish addition to your home with a coat of paint (or stain) and some other design tricks.

You can have a stylish room with a designer look on a budget. You just have to know where to look, and how to see beyond what something is, to what it could be.