Smart Shopping Tips For Residential Systems

April 20, 2010 by · Leave a Comment  

Home Shopping ListMost homeowners spend more time researching the purchase of a big-screen TV or cell phone than they do replacements for major systems in their home.

APR 20, 2010
Realty Times

The following Five Smart Shopping Tips should help you ace your next major purchase for your home. Our example is windows, but apply the ideas presented here to whatever you’re shopping for. These suggestions frame issues to reveal the types of questions to ask and ask in our “buyer beware” marketplace until answers make a lot of sense.

Tip #1. No short cuts or you’ll be short-changed As we’ve observed before, most real estate owners spend more time researching the purchase of a big-screen TV or cell phone than they do replacements for major systems in their home. Instead of looking for a quick way to buy the right product or jumping at the word “discount,” start by clarifying exactly how much is being replaced and why. This reveals what can be gained at each major price point and where disappointments lie. For instance, for windows there are three basic degrees of change, with costs and complexity increasing as you go down the list: [indent + numbered list begins]

  1. Replacement Windows are pre-fabricated windows, frame and all, which are popped into existing window frames. The double frame is then capped for aesthetics. The interior wall and trim remain untouched. Adding significant insulation is usually not possible. “Quick and easy” is how installers describe it.
  2. “Brick to brick” refers to removing the existing frame and glass to expose the opening in the exterior brick wall of a home. A pre-fabricated window is then fit into the opening. This renovation requires removal and replacement of the interior trim, and may damage surrounding interior walls. Window coverings may need adjustment or replacement.
  3. “Whatever you want” says the contractor and begins cutting the brick on one or more sides of an existing window opening or creating a new hole to accommodate a new and larger window. Corresponding interior wall and trim is removed, too. Then, a pre-fabricated window is fit into the new opening. Repair to the inner wall, new finishing and new window coverings are required.

Tip #2. Don’t just budget for the major purchase, budget for full completion of the entire project. With our window example, that would mean including the cost of interior wall repair, trim replacement and window coverings to determine the exact investment of time and money for the project.

Tip #3. Clarify your goals or you’ll end up with what the supplier wants to sell, or what the contractor knows how to build. When I opted to replace original 20th-Century wood windows, my prime goal was having as much light as the budget allowed. Damage to the interior was a low priority. Yet, most window installers stressed replacement windows which would pop in with no interior damage—which also netted them the most money. I wanted brick-to-brick to compensate for the wider frame of modern windows and I persisted until I found that skilled, knowledgeable professional installer.

Tip #4. The whole must be greater than the sum of the parts. Consider your home as a whole even when you tackle replacement of one element. If windows were the last thing on your update list, did you research market choices when you did the roof and other elements to be sure of the necessary material and colour match?

Window installers push the glaring white frame because this is cheaper and easier for them. Search out manufacturers that have a wider range of standard colours than blinding white, yellow beige, khaki and easy-fade brown. “Custom colours” may be advertised, but that represents a whole new challenge and expense. An expert installer can help you with a cost-effective project that blends with your exterior decor to add value to your real estate as a whole.

Tip #5. Consider the source and buyer be aware. Flyers and brochures that appear in your mailbox, snail or otherwise, are not educational material, but sales pitches. Canada Mortgage and Housing Corporation, the national housing agency, has many explanations of how things work, what choices there are, what to avoid and what’s coming down the road in home systems.

Take advantage of local home and consumer shows, but take your scepticism with you if you’re buying at a show. Check local prices so you can recognize a great deal when you see one. Sometimes end-of-show bargains are the best.

When it comes to hands-on expertise, there’s the phone book, internet and big-box stores, but there’s an entire layer of qualified, cost-effective professionals that consumers may overlook. “If you do not know where to start, this [window decor] business is highly geared to a referral basis,” said Window Decor Specialist Arthur Stemerman, President and Owner of Toronto’s House of Shutters and Blinds “I do not get a cold call unless someone sees my truck. My business is driven by referral and the interior designers I work for, who are hired to help people who do not know where to start.” Stemerman stresses the value of education, online and off, for consumers. It’s one of the reasons his company participated in the Interior Design Show’s “The Ultimate Party,” an opening night event that welcomed the public into the normally “trade-only” trade show. BONUS TIP: Put this event on your calendar for 2011:

To illustrate the power of window knowledge, Stemerman dispelled common myths about sun-protection products:

Myth #1: Southern-facing windows present the greatest sun challenges of heat and fading by ultraviolet rays (UV).

Reality: Sun is an issue for most south windows, but it is west-facing windows, particularly floor-to-ceiling versions common in condominiums, where sun can present the greatest challenge: heat. The sun moves through an arc which varies in intensity in the south, but from late afternoon to sunset, the sun sits in the western sky. Black-out drapes or wooden shades may block UV and light, but they intensify heat released when sun rays strike the window covering. Solar or perforated blinds reduce this effect. They are made from mesh fabrics which allow UV to “breath through the roller shade,” controlling heat and glare.

Myth #2: Looks are all that matter with solar blinds.

Reality: Differences in fabric and manufacturing quality impact on functionality, so it’s not just about finding the least expensive. For instance, search out fabrics labelled with clear specifications, like 10% openness which screens about 90% of UV, according to Stemerman.

Myth #3: Motorization always works.

Reality: Motorizing blind movement should not pose problems, but ensure parts and servicing are readily available and reliable. Think ahead and ensure the motorizing system can be integrated into a home automation system.
Copyright ? 2010 Realty Times. All Rights Reserved.

Understanding Different Types of Loans

October 7, 2009 by · Leave a Comment  

There Are Many Types Of Home LoansToday’s homebuyer has more financing options than have ever been available before. From traditional mortgages to adjustable-rate and hybrid loans, there are financing packages designed to meet the needs of virtually anyone.

While the different choices may seem overwhelming at first, the overall goal is really quite simple: you want to find a loan that fits both your current financial situation and your future plans. Though this article discusses some of the more common loan types, you should spend time talking with different lenders before deciding on the right loan for your situation.

General categories of loans?

Most loans fall into three major categories: fixed-rate, adjustable-rate, and hybrid loans that combine features of both.

•    Fixed-rate mortgages

As the name implies, a fixed-rate mortgage carries the same interest rate for the life of the loan. Traditionally, fixed-rate mortgages have been the most popular choice among homeowners, because the fixed monthly payment is easy to plan and budget for, and can help protect against inflation. Fixed-rate mortgages are most common in 30-year and 15-year terms, but recently more lenders have begun offering 20-year and 40-year loans.

•    Adjustable-rate mortgages (ARM)

Adjustable-rate mortgages differ from fixed-rate mortgages in that the interest rate and monthly payment can change over the life of the loan. This is because the interest rate for an ARM is tied to an index (such as Treasury Securities) that may rise or fall over time. In order to protect against dramatic increases in the rate, ARM loans usually have caps that limit the rate from rising above a certain amount between adjustments (i.e. no more than 2 percent a year), as well as a ceiling on how much the rate can go up during the life of the loan (i.e. no more than 6 percent). With these protections and low introductory rates, ARM loans have become the most widely accepted alternative to fixed-rate mortgages.

•    Hybrid loans

Hybrid loans combine features of both fixed-rate and adjustable-rate mortgages. Typically, a hybrid loan may start with a fixed-rate for a certain length of time, and then later convert to an adjustable-rate mortgage. However, be sure to check with your lender and find out how much the rate may increase after the conversion, as some hybrid loans do not have interest rate caps for the first adjustment period.

Other hybrid loans may start with a fixed interest rate for several years, and then later change to another (usually higher) fixed interest rate for the remainder of the loan term. Lenders frequently charge a lower introductory interest rate for hybrid loans vs. a traditional fixed-rate mortgage, which makes hybrid loans attractive to homeowners who desire the stability of a fixed-rate, but only plan to stay in their properties for a short time.

Balloon payments

A balloon payment refers to a loan that has a large, final payment due at the end of the loan. For example, there are currently fixed-rate loans which allow homeowners to make payments based on a 30-year loan, even though the entire balance of the loan may be due (the balloon payment) after 7 years. As with some hybrid loans, balloon loans may be attractive to homeowners who do not plan to stay in their house more than a short period of time.

Time as a factor in your loan choice

As has been discussed, the length of time you plan to own a property may have a strong influence on the type of loan you choose. For example, if you plan to stay in a home for 10 years or longer, a traditional fixed-rate mortgage may be your best bet. But if you plan on owning a home for a very short period (5 years or less), then the low introductory rate of an adjustable-rate mortgage may make the most financial sense. In general, ARMs have the lowest introductory interest rates, followed by hybrid loans, and then traditional fixed-rate mortgages.
FHA and VA loans?U.S. government loan programs such as those of the Federal Housing Authority (FHA) and Department of Veterans Affairs (VA) are designed to promote home ownership for people who might not otherwise be able to qualify for a conventional loan. Both FHA and VA loans have lower qualifying ratios than conventional loans, and often require smaller or no down payments.

Bear in mind, however, that FHA and VA loans are not issued by the government; rather, the loans are made by private lenders. FHA loans are insured to the actual lender and VA loans are guaranteed in case the borrower defaults. Remember too, that while any U.S. citizen may apply for a FHA loan, VA loans are only available to veterans or their spouses and certain government employees.

Conventional loans

A conventional loan is simply a loan offered by a traditional private lender. They may be fixed-rate, adjustable, hybrid or other types. While conventional loans may be harder to qualify for than government-backed loans, they often require less paperwork and typically do not have a maximum allowable amount.

Your Credit History

October 7, 2009 by · Leave a Comment  

Bad Credit Can Hurt Your Mortgage RateAs part of the loan application process, virtually all lenders will want to see a copy of your credit report. The report will list all your long-term debts (credit cards, mortgage payments, automobile and student loans, etc), as well as your payment history. If you don’t have a copy of your credit report, most lenders will generally require you to pay for a copy when they process your loan application.

However, most real estate experts agree that it is a good idea to obtain a copy of your credit report several months before you apply for a loan. This is so you have a chance to resolve any problems with your credit before your bank sees it. U.S. Federal law ensures that you have access to your credit report, which may be obtained from your local credit bureau or any of several national firms that specialize in credit reports.

Late payments?

For most people, problems with their credit report are likely related to late payments on a debt. If you were late one month in paying off your credit card, but otherwise have a good payment history, chances are most lenders won’t be too concerned. But if you have a history of late payments you’ll need to document the reasons why. A slow payment history won’t necessarily get you turned down for a loan, but you may have to pay a higher rate of interest or otherwise prove to the lender that you can repay your loan in a timely fashion.

Errors on your credit report?

Many people are surprised to learn that credit reports can often contains errors or inaccurate information. If this is the case with your credit report, you’ll need to contact the reporting agency or creditor to have the problem resolved. This can sometimes be a slow process, so make sure to give yourself time to clear up the mistake. Bankruptcies and foreclosures?There’s no getting around it, a bankruptcy on your credit report is not a good thing. But that doesn’t mean you still can’t obtain a loan. Even though a bankruptcy may stay on your credit report for seven to ten years, lenders will often consider the circumstances surrounding a bankruptcy (family illness, injury, etc.). Moreover, if you have reestablished good credit since the bankruptcy, a lender will be more inclined to approve your application.