Should You Rent or Buy?

According to “The Niche Report,” recently, mortgage rates for a 30-year fixed-rate mortgage reached 3.66%. This was after several weeks of record-setting lows. When you consider this with the rising costs of renting, financial experts are recommending that the time is right for renters to think about buying a home. Especially since if the economy does start to improve as projected, mortgages rates will likely go up.

To rent or to own a home is a both an emotional and economic decision for people.  Plus, it depends upon your particular circumstances. To help you make your decision, let’s examine each option: 

Pros of Renting 

·         Less money upfront – When you rent, you only have to come up with a security deposit and the first and last month’s rent.

·         Flexibility to move – If your job requires you to move around a lot or you just want to check out a neighborhood first, you can rent without making a long-term commitment.

·         Income uncertainty – If you’re unsure about your job or income, this can affect your ability to borrow money and pay a mortgage.

·         Time to improve your credit – If you have bad credit, during the time you’re renting, you can work to improve your credit so you can qualify for a loan.

·         No maintenance – If you have problems with the plumbing or anything else, all you have to do is call your landlord to get it fixed.

·         Possible paid utilities – Occasionally, your utilities such as water, sewer, heat or garbage may be included in your rent so you don’t have to pay extra for them.

Cons of Renting 

·         Rent increases – Your landlord may increase your rent periodically.

·         No equity – The money you spent on rent is gone forever. You’re not building equity in your home.

·         Limited freedom – You must adhere to your landlord’s rules when renting. This can mean no re-decorating, no pets and/or no smoking.

·         Unresponsive landlord – You’re at the mercy of your landlord’s schedule regarding repairs and renovations.

Pros of Buying 

·         Build equity – With each mortgage payment, you increase how much you own of your home. Plus you can borrow against the equity in your home to make renovations or purchases.

·         Tax breaks – You can deduct mortgage interest and property taxes on your tax return. And you may be eligible for deductions when you work from home.

·         Customization of your home – When you own you decide how you want to decorate or if you want to remodel.

·         Maintenance upkeep – When you own your home, you can make repairs or hire someone to do them for you.

·         Pride of ownership – You can live the American Dream of owning your home. 

Cons of Buying 

·         Upfront costs – When you buy a home, you’re required to pay a down payment, closing costs, home inspection cost and other fees.

·         Other homeownership costs – You also have to pay property tax and homeowners insurance premiums. Plus you’re responsible for all utility payments.

·         Inflexibility – You can’t just move whenever you want.

·         Maintenance costs – You are responsible for all maintenance done on your home and the associated costs. 

Hopefully these pros and cons will help you make your decision on whether you should rent or buy. If you decide now is the right time for home ownership, contact Grandview Lending. We can take a look at your individual circumstances and find a home mortgage solution tailored to meet your needs.   

Tips for Selecting a Qualified Home Inspector

Buying a house can be a big investment. Therefore, you want to make sure the home you’re buying doesn’t have serious safety problems or defects. So, it’s important to take the time to choose a qualified home inspector, because, unfortunately, there are incompetent inspectors out there.  

Here are some tips to help you screen potential home inspectors to make sure the one you choose is qualified for the job. 

1.        There are several ways to find a home inspector. Your Realtor may be able provide you with a list of inspectors. You may want to ask your banker or attorney for referrals. You can contact a national organization like the National Association of Home Inspectors (NAHI) for a list of inspectors in your area. Or, you can do a general Google search. However, the best way to find an inspector is to ask friends and family members for recommendations of inspectors they have personally used and were satisfied with their performance.

2.        Contact the inspector and interview him/her. If the inspector gets defensive with your questions, rule the person out. A good inspection company shouldn’t mind your questions upfront.

3.        When dealing with an inspection company, tell them you want an experienced inspector to do the inspection – not someone new in the business.

4.        Find out how long the inspector has been in business, how many home inspections he/she has performed and how knowledgeable he/she is regarding all the systems in a home. A good inspector may have a degree in engineering or architecture, or they may have trained as a general contractor. You want an inspector with at least 15 years of formal training and full-time, on-the-job experience. Also a good inspector will perform at least 250 inspections a year.

5.        Prior to the call find out if your state requires licensing. Most states don’t. But if your state does require a license, ask the inspector if he/she is licensed.

6.        Ask if he/she is certified or belongs to a professional home inspection organization like NAHI or the American Society of Home Inspectors. Certification and/or affiliation with an organization will likely ensure that the inspector abides to strict standardized practices and a code of ethics. However, make sure the certification is from a reputable source instead of those obtained through quick-study courses or sold through trade organizations.

7.        Does the inspector have general liability insurance and errors and omissions insurance? These policies cover the inspector in the event of property damage or bodily damage to him/her during the inspection and to you and your family in case something occurs at a later date that he/she missed on the report.

8.        Ask if the inspector provides a detailed written report and not just a handwritten checklist which may be hard to read and lacking in all the information you need. The report should include: a) A detailed overview of the house on the day of the inspection, including all the major components and their condition; b) A list of things needing maintenance; and c) A list of items requiring major repairs. The report should clearly identify and explain the problem plus what needs to be done. The inspector also may provide an estimated repair/replacement cost for each item. Ask if you can obtain a sample report to review to make sure you can understand what the inspector will be providing.

9.        Ask him/her when you would get the report. Checklist or handwritten reports are usually given to you at the conclusion of an inspection. If the inspector brings a laptop with him/her, he/she may be able to provide a more detailed report on-site. Otherwise, a detailed report will probably be mailed to you, so you need to know how many days it may take before you receive it.

10.     Find out how long the inspection will take. A thorough inspection will take more than 2 hours.

11.     Find out what equipment the inspector uses. While many inspectors will only bring a flashlight, savvy inspectors may use more advanced testing devices like carbon monoxide and gas analyzers, electrical circuit analyzers or digital cameras.

12.     Ask how much the inspection will cost. A more qualified, experienced inspector will not be the cheap. You don’t want to hire someone based on cost that may miss potential problems that may cost you thousands of dollars in the near future.

By hiring an experienced, qualified inspector, you can uncover potential problems that you may be able to get the current homeowners to fix before you move in – saving you time and money.

If you’re looking for a new home, contact Grandview Lending to help you work through the complex mortgage lending process. Our experienced brokers have extensive knowledge of the many loan programs available and will help you find one that fits your needs.

12 Tips for Making Your Home Safer

June is National Safety Month. While you may think of your home as your safe haven, this may not always be the case. Your home can be the site of potential dangers just waiting to happen. Therefore, it’s important recognize these hazards and make changes to ensure your home is a safe place for everyone.

Here are 12 ways to prevent accidents and injuries in your home:

1.        Ensure all your doors and windows have working, tamper-proof locks. Install 1-inch deadbolt locks on all exterior doors.

2.        Keep your garage doors closed at all times, even when you’re home, to prevent intruders from walking into your house.

3.        Install smoke detectors on every floor of your home. Put them inside or near every bedroom. Test them monthly to ensure they’re working correctly. Replace the batteries once a year.

4.        Install carbon monoxide detectors near bedrooms Test them monthly and replace the batteries annually.

5.        Place fire extinguishers in your kitchen, bedroom area and basement. Learn how to use them safely. Check them regularly (at least once a quarter) to ensure they have enough pressure in them to operate correctly.

6.        Create a fire escape plan and hold family fire drills at least twice a year. If your home has multiple floors, make sure you have escape ladders in place.

7.        Keep the interior and exterior of your home well lit. Key areas include foyers, stairways, bathrooms, kitchens, sidewalks and at exterior doors.

8.        Take care of all electrical problems immediately. Ensure all major appliances are grounded. Unplug appliances when they’re not in use. Don’t overload extension cords.

9.        Set your water heater at or below 120°F to prevent potential burns.

10.     Prevent slips and falls by keeping floors and stairs clutter free. Clean up all spills immediately.

11.     Child proof your home if you have small children. Place covers on electrical outlets. Keep all cleaning supplies, medications and beauty products out of reach. Install child safety locks. Place safety gates at the top and bottom of stairs.

12.     Install an approved safety covering on swimming pools, and/or a fence or barrier around swimming pools, and/or an alarm on doors leading to the pool. Keep all doors and windows leading to the pool locked. Make sure gate or door latches are out of reach of small children. Never leave children unsupervised near a pool. Always have a designated person watching young children around the pool.

By following these 12 tips, you can protect yourself, your family and your house guests and help prevent many accidents from occurring.

At Grandview Lending, we care about our customers. When you’re ready to purchase a new home or refinance an existing one, contact us. We can assess your goals and offer customized options that fit your needs.

5 Signs a Home May Have a Potential AC Problem

If you live in warm weather climate, central air conditioning can keep a home cool and comfortable on those hot summer days. Therefore, if you’re looking for a new home, central air may be high on your wish list. But it can also be a major concern when considering energy and potential maintenance costs. If you had to replace the air conditioning unit a few years after moving in, it could set you back $3,000 or more, depending upon the size of the home.  

So how can you be sure a home’s AC system is in good working condition before you buy a new home? While you may not have the tools or training to do a thorough inspection, there are some things you can check for which may clue you in to potential problems. 

How old is the air conditioning unit?  

Find out how old the air conditioning unit is. The age can help you determine the condition of the unit, its energy efficiency or SEER rating, and if it’s still under warranty. (The SEER or Seasonal Energy Efficiency Ratio measures air conditioning and heat pump cooling efficiency.) AC units built before January 2006 had a minimum allowable SEER rating of 10. Units built after that date must have a rating of 13 or more. The higher the SEER rating, the more energy efficient the unit will be. If the owner doesn’t know the age of the unit, get the serial number from the identification plate on the unit and call the manufacturer. 

Are all the rooms being cooled adequately? 

As you walk around the house, check to see if certain rooms are hotter or colder than others. All of the rooms should have a consistent temperature. If not, then this may indicate a problem with the AC unit, leaking ducts or inadequate insulation. 

Is there moisture around the ducts or indoor unit? 

Condensation around the ducts or a leaking indoor unit can cause mold to form which affects the indoor air quality of the home. Mold can also lead to illnesses.  

Is the air conditioner noisy? 

While an outdoor compressor can make a lot of noise, too much noise may indicate a potential problem. Most new units are quieter. So if you hear any clanging or screeching sounds, a part may be coming loose.  

Does the home have an odd odor? 

If the AC unit appears to be blowing strange- or stale-smelling air, the air filter may need to be replaced or the unit may have a refrigerant leak.

If you’re concerned the home may have a potential AC problem, have a professional air conditioning contractor check out the unit. They can determine the age of the system, its capacity, its condition and expected life, and whether any repairs are needed. The inspection cost is well worth the potential future expense of unit repairs or replacement. 

If a problem is detected, talk to your real estate agent about what to do next. You can either ask the seller to repair or replace the unit; renegotiate the sales price based upon repair/replacement costs you would need to make; or cancel the contract. But do something, otherwise you may find yourself sweating it out in your new home at a later date. 

In addition to knowing all the facts about a home’s AC unit, you also need to know all the facts and options available to you regarding the best mortgage solution for your needs. Contact a trusted mortgage broker to help you make the right decision.