Like many optimistic homeowners out there, I join the ranks of those who renovate a home. My experience thus far ranges from the small to the large. Mostly because when we bought it, we knew upfront that the house needed updating not just from an aesthetics point of view, but also for function and growth. Here I will share with you how even someone in the real estate business suffers equally with finding competent help, working with dead lines and budgets, disillusionment, above all, exercising patience.

 

It is interesting how it begins. Hopefulness, desire, dreams of a better future, and for us what acted as our motivator, we believed in this house and all that it could be.   

 

We purchased our home back in 2004. Similar to those I represent, the process was frightening and very stressful. I think I felt even more pressure to do right because of my profession. My family was counting on me to deliver. Even though I was fully aware of the potential pitfalls, I found that it shook my core when I was faced with specific negotiating items. Do I pass pushing certain issues that could eventually bite me in the behind? Or, do I take that leap of faith and trust that these items will get address in due time. It’s very hard to remain objective when you are in the center of things.   This is where our journey begins.

 

Very first thing we did before moving in was refinishing the hardwood floors. We had a total of 4 rooms and a hallway that was in desperate need of a facelift. Certain rooms such as the two first floor bedrooms were quite atrocious. It had appeared as if some quick and sloppy job of staining the floors left them with uneven dark spots and what even appeared to be burns.

 

While trying to schedule that, we also removed the radiator heat and put in central heat and air. Now, I know the argument for which is the better source of heat is. Quite frankly, in order to enjoy any pleasure of central air (and I am not a person who enjoys sweating), we would have to go this route. To add what is called a sub Pac to an existing radiator heating source would still require eating into my floors and walls to run duct work AND cost about 4 times as much. Not to mention, my new home is not exactly massive in size so the current radiators were definitely space hogs. I kept trying to postpone the heating service waiting for a new Bungalow Initiative that credited homeowners with up to $2000 back towards their HVAC installation costs, however, at with only 3 weeks in the count down before I had to move in, time was running out.

 

So, between tearing out the radiators and adding a new HVAC system, we carefully (and stressfully) coordinated the two within the same time frame. If you are allowed this opportunity please do so. I strongly recommend any type of work that inhibits living conditions (and believe me, refinishing floors fits the bill, not to mention lack of heat) seize the moment before all else. You will be thankful. First rule of thumb, get estimates and don’t be shy with them.  As a salesperson, I myself was becoming quite amused with the techniques presented to me of what I refer to as, the dance. Avoiding answering any substantial questions without a real commitment or conviction for that matter was a theme I was becoming more and more aware of. Don’t go for the cheapest for I believe something is being compromised and unless you are educated in that specific trade or skill, you won’t know what it is, or even to inquire about it. And don’t go for the most expensive. If the person who comes out to give you an estimate is a sales person and not the proprietor or the actual person doing the job, factor in the overhead. 

 

I also find that if the person quickly finds something else to ask you about, such as whether or not something has been done recently, you can bet they are sizing up what else they can attempt to persuade you to purchase. It’s called, up selling. If they suggest additional work or materials, ask for it to be itemized separately from the original job quote and have them clearly state the pros and cons. Once they leave, Google it. There is a definite truism about home repair and improvement project proposals and estimates. Pricing can drastically vary, its up to you to figure out why.

 

Next week; siding, painting, and trim work.

 

 

 My guest writer today is a wonderful Mortgage Broker (I personally use her!) who offers sound advise about whether or not to refinance.

To refinance or not to refinance, that is the question!

 

I receive dozens of phone calls from clients every week asking whether they should refinance their current home loans. There are many factors to take into consideration when refinancing and rates aren’t the only thing to consider. In fact the state of Illinois and several other states now require to all borrowers to sign what is called a “Tangible Benefits Disclosure” when refinancing. Under Illinois law, the new or refinanced loan must show reasonable, tangible net benefit to the borrower after taking into account the terms of the new and existing loans, the cost of the new loan and the borrower’s personal circumstances. Here are 5 reasons to refinance that make sense and offer a tangible benefit!

 

 

 

1)      The obvious, but not the only reason to refinance, is to lower your interest rate and save money! If your in an Adjustable Rate Mortgage (ARM) and your rate has just adjusted or is about to adjust in the next few months, chances are your mortgage rate will adjust significantly higher. It’s time to consider refinancing into a Fixed rate or a new ARM, depending on your circumstances. 

 

 

2)      Another thing to consider is whether your credit score has greatly increased since you purchased your home. If your credit score was below 680, you had a bankruptcy or other derogatory credit, chances are that the interest rate you signed for was a little bit higher. Now is the time to check your score and see if you can refinance at a lower rate.

 

 

3)      Consolidate your 1^st and 2^nd mortgages into one loan or get rid of Private Mortgage Insurance (PMI). If you purchased a home and put no money down or less than 20% down, you likely have a 1^st and 2^nd combo loan also known as an 80/20 or 80/10/10 or you might be paying PMI. Now is the time to speak to a mortgage consultant and consolidate the 1^st and 2^nd loans or rid yourself of PMI and lower your monthly payments substantially.

 

 

4)      Payoff those high interest credit cards. In January 2006, credit card companies doubled their minimum monthly payments from 2% to 4%. This means that if you had a credit card balance of $10,000 and payment of $200, your increased payment is now $400. If you were to refinance at a rate of 6% and payoff the $10,000 credit card debt, your payment would only increase some $60 per month.

 

 

5)      Cash out your equity for home improvements or pay for college tuition. Instead of borrowing the money from credit cards or financing with home improvement companies, use the equity in your home to finance any needed home improvement projects. Also, if your children are nearing college age and you don’t have enough money socked up for tuition, consider setting up a college fund with the equity in your home.