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3 Reasons Your Rent-vs-Buy Math Might Be Wrong

11/4/2019
It's common knowledge that owning a home is cheaper than renting (at least in the long term), but anyone who has ever sat down to try and figure out the numbers knows that finding out how much you'll save is harder than it looks. There are so many factors to consider.

To try and help you come as close to the real number as possible, we've outlined three ways your rent-vs-buy math might be wrong — and how to straighten things out to give you the best picture possible. Keep these details in mind as you weigh your decision and you'll have a much clearer vision of which path is right for you.

You're only looking at the mortgage payment

Anyone who's ever looked at a mortgage calculator knows that seeing that number can be shocking - in a good way. For the most part, the number you'll see there ends up being far less than monthly rent. Unfortunately, though, it only tells part of the story. It only accounts for your mortgage payment.

In addition to a loan payment, homeowners need to account for supplemental costs like their homeowners insurance and property taxes. Be sure to include those costs into your estimates. To estimate property taxes, you can take the property tax percentage in the area where you'll be living and multiply it by the value of a potential property you'd buy. For homeowner's insurance, the Federal Reserve Bureau estimates that premiums typically fall between $300 - $1,000, annually.

You need to account for closing costs

The term "closing costs" simply refers the fees that are incurred during the buying process. They're unique to each sale, but could include things such as the costs of inspections and appraisals, the cost of running a title search, or an association fee. These costs are paid at settlement and typically add up to a few thousand dollars, so they should absolutely be accounted for in your home-buying budget. For instance, if you expect to stay in your future home for around 5 years (before you outgrow it or take off to a new city), add in one-fifth of the closing costs to your annual expenses when considering whether renting or buying ends up cheaper.

Luckily, there are a few ways to cut down on these costs. While some fees are fixed according to the home sale regulations in your area, others are negotiable. Try your best to buy when mortgage interest rates are low and to go research professionals (like your inspectors and loan rep) who have low fees. During sale negotiations, you may also be able to ask the seller to cover a portion of the costs in exchange for a higher sale price.

You'll receive new tax benefits

Don't forget that becoming a homeowner can significantly impact your tax return. Especially in the first year of homeownership, you'll qualify for quite a few additional deductions. Since each deduction comes with it's own stipulations, it's important to do your own research to see if you qualify, but here are a few of the most common:

  • A portion of their mortgage interest, if you make less than $100,000
  • A portion of the "points", or fees on your loan may also be deducted.
  • Portions of home improvement and home equity loans
  • Property taxes that are being held in escrow
  • Moving expenses, if you moved for a job offer

Again, make sure to do a little extra prep work around tax time the first year after you buy or to consult a tax professional, so that you know you're getting the most out of your deductions. While you'll still be putting out a lot of money upfront, you could see a good portion of it come back to you.

"America Recycles Day" Returns to Coolray Field November 9

10/28/2019
Gwinnett Clean & Beautiful and Gwinnett County Solid Waste Management are gearing up for "America Recycles Day" set to take place Saturday, November 9 at Coolray Field in Lawrenceville. The popular event represents Gwinnett County’s answer to a Keep America Beautiful initiative that is commemorated nationwide. GC&B encourages Gwinnett County residents to start decluttering their closets, garages, basements, attics, storage units and offices. In addition to hard-to-recycle items that will be collected that day, GC&B and its partners at Solid Waste Management are in search of volunteers to help direct traffic and collect items from participants’ vehicles. The event will take place from 9 a.m. to noon, but volunteers are asked to report at 7:30 a.m. and to expect to stay until 1 p.m. 
 

Items that will be collected at Gwinnett’s America Recycles Day event include:
  • Electronics – electronics recycling is free except for TVs, monitors, and printers – $15 cash fee per TV or computer monitor and a $5 cash fee per printer
  • Tires – limited to eight tires per vehicle, no dealer tires
  • Paint – limited to 10 gallons per vehicle
  • Ink cartridges
  • Clothing and sneakers
  • Paper for secure shredding – limit five copier paper boxes per vehicle
 
For all details on this event, visit http://www.gwinnettcb.org/america-recycles-day-returns-to-coolray-field-november-9/

Title Insurance: What It Is and Why You (Probably) Need It - 01/17/2018

10/24/2019

Title insurance: It’s another one of those mysterious fees buried inside the pile of paperwork you’ll receive at your loan closing. Who knows what it’s all about? All you’ve figured out is that lenders require a policy for their protection, and either you or the seller will have to pay for it — and then you’ll be asked if you want an owner’s title policy, too.

Here’s how title insurance works, how to decide whether you need your own policy, and how much you can expect to pay.

What is title insurance?

Title insurance protects the insured from a financial loss related to the ownership of a property. There are two policies in the mix at a home loan closing: the lender’s policy, which is required, and an optional owner’s policy. Both are a one-time, upfront cost — not a monthly premium that will be added to your mortgage payment.

When you’re in the process of buying a home, a title research company will check the property’s ownership history. Ideally, your new home has what’s called a “clear title.” That means the current owner, who is selling to you, has a complete ownership stake in the property, without any legal claims against it. Claims can be in the form of a lien or levy from a lender, creditor or — in the event of taxes due — the government.

If the research company doesn’t find any outstanding claims or title defects, why buy title insurance? Because an as-yet-undiscovered issue could cloud the ownership of the property years after the purchase. That could be a mistake in the ownership history, an oversight committed by the title researcher, even a previously unknown heir. Maybe there’s a pending lawsuit or legal judgment. A title issue could also arise as a matter of fraud.

A title defect that arises after a loan closing could, at the very least, mean a variety of legal costs — and, in a worst-case event, the loss of your property and the money you’ve put in it.

Lenders insist on title insurance to protect their interest in the loan. And that makes sense, because they’re on the hook for the majority of the home’s value, especially in the early years of the mortgage.

» MORE: Calculate your closing costs

Do you need owner’s title insurance?

Can you make a case against buying the owner’s title insurance policy? Sure. But let’s think this all the way through before making a decision.

“Here’s the deal: When you buy a house or build a property, usually you get a warranty deed,” says Martin Farris, a mortgage broker in San Angelo, Texas. “That means the seller is saying, ‘This is a good deed. I own this property free and clear. I’m transferring it to you free of any other liens.’”

So any ownership defect would be the seller’s responsibility, right? And as a buyer, you’re in the clear — any legal action would be against the seller. But remember, the seller has transferred that risk to the insurance company. And even though the lender is protected by the title policy, your stake in the home could be at risk. That would be equal to your down payment and any equity you have. Again, a title claim could happen many years after your purchase.

For many home buyers, purchasing an owner’s title insurance policy is a matter of being safe rather than sorry.

How much does title insurance cost?

A lender’s title insurance policy is a given, and maybe now you think an owner’s policy isn’t a bad idea. How much will it cost to buy both?

Sometimes nothing. You might be able to negotiate to have the seller pay for both policies.

But if you end up shouldering the cost, your policy might not cost much. “When you buy two title policies in Texas, the first one you buy at full price. The second one you buy and they charge you a hundred bucks for it,” Farris says. It’s a discount called the “simultaneous issue rate” — kind of a “BOGO” thing.

Prices and discounts vary from state to state. You can expect to pay somewhere between $1,000 and $4,000 for title insurance, according to CourtHouseDirect.com, a courthouse data research website.

Some states regulate insurance rates, so there may not be much cost difference among insurers, such as in Texas. But in other locations, title insurance is one more closing cost that you can shop for.

The American Land Title Association provides a list of insurers by state and city. There are also title insurance providers online, such as EntitleDirect.com.

 


The article Title Insurance: What It Is and Why You (Probably) Need It originally appeared on NerdWallet.

5 Most Common Things Found During a Home Inspection

10/16/2019


Whether you are a homeowner, first-time buyer or seller, you can benefit from getting a home inspection done to bring potential problems to light before they worsen.

An inspection is extremely helpful before selling your home so you can address the potential concerns of buyers. Also, those buying a home should never skip the inspection, since you need to be positive there are no major repairs needed before purchasing the home. It can also leave you room to negotiate the price of the home if there are big repairs that need to be taken care of.

To give you an idea of what a home inspector may find, here are the most common issues and what they mean for the home.

1. Faults with the electrical wiring
Issues with a home’s electrical wiring are more common than many people realize, and they can pose a significant problem. In fact, the typical house fire is due to faulty wiring.

Typically issues with faulty wiring include undersized or improper wiring and reverse polarity wiring. The latter is when neutral wires and hot wires are placed in an improper outlet terminal, which could cause a system short.

Double-tapped breakers are another potential problem where two electrical circuits are attached to just one electric breaker. The good news is that most of these electrical wiring issues can be resolved fairly quickly and cheaply.

2. Problems related to drainage
Other issues that home inspectors often find are related to drainage. If you don’t take care of drainage issues right away, minor problems can turn into significant problems.

Perhaps water will flow into the basement when it rains due to backed up drainage or the yard has a slope that stops water runoff from moving away from the home properly. Sometimes this is even combined with a downspout that doesn’t move the gutter water away from the property.

In other cases, the downspouts themselves will be the issue, routing the water to the area by the front entrance walkway and creating flooding. Combine drainage problems with unsealed cracks along the walls, and water could get into other areas of the home.

All of these issues are preventable by fixing the drainage immediately.

3. Issues with the roof
Inspectors are on the lookout for a wide range of problems related to the roof. Roof damage can lead to additional problems inside and even outside of a home.

A potential issue could be curling or buckling of the roof shingles, which occurs naturally with age. It can frequently occur due to the double bake effect, which indicates insufficient ventilation in the attic and leads to the tiles being “baked” from the sun above the roof and the poor ventilation beneath the roof.

If an inspector notices the shingles buckling or curling, they will suggest repairs, as this can lead to the shingles wearing out prematurely. Repairing a roof can be incredibly expensive, so it’s valuable for a home buyer to know that before finalizing the purchase.

4. Plumbing problems
Going back to water-related issues, many older homes will experience faulty plumbing of some sort. Sometimes, there isn’t enough water pressure. Other times, the drains are slow or there are indications of leaks along the ceilings.

Low water pressure can be an easy fix, such as cleaning the aerator screen on the shower head or replacing it. However, this same problem may be due to something serious, such as a leak in the home or corrosion within the pipes, either of which would be costly to repair.

Of course, the inspector may also find another issue, such as leaky pipes, particularly near the joints, which can lead to water damage. 

5. General maintenance
You may not think about routine maintenance during a home inspection, but any neglect by the homeowners can really add up.

Problems can include something simple like the dryer vent being in dire need of cleaning or showers and tubs not being re-caulked. Although major issues would be caught by a home inspector, there might be a dizzying number of minor maintenance tasks that you can get from a home inspection.

A home buyer might be wary to take all of these on with their brand new house.

 

This article 5 Most Common Things Found During a Home Inspection originally appeared in mortgages.com

Grace Kussow is the Content Coordinator at InspectorPro Insurance, the premier home inspector insurance program in the US. As part of her role, she develops content to educate homeowners and home buyers about home inspections.

Be Prepared for Tornado Season in Georgia

3/1/2018

Tornado season in Georgia peaks during the months of March, April & May.

All of Georgia is prone to tornadoes. The average number of days with reported tornadoes is 6 in Georgia. Tornadoes have been reported throughout the year, but are most likely to occur from March to May with the peak in April. Tornadoes are also most likely in the mid afternoon to early evening time frame, but can occur any time of the day or night.

Thirty-seven percent of all tornadoes are classified as strong or violent (EF2 or greater on the Enhanced Fujita Scale), and these tornadoes are most likely to occur in the month of April.

Although Georgia has seen a few EF-4 tornadoes, with the most recent one on April 27, 2011 in Catoosa County, the state has never recorded an EF-5 tornado.

In Georgia, tornadoes are often hard to see as they are wrapped in areas of rain and hail. The hilly terrain can also limit your ability to see a tornado.

Start preparing now & educate yourself!

Know the difference between a Tornado Watch and a Tornado Warning.

  • A Tornado Watch alerts us signifying that weather conditions are conducive to a tornado and that a tornado is possible in your area.
  • A Tornado Warning signifies that a tornado has been spotted in your area and shelter should be taken immediately.

For more information about tornado safety, visit:

http://ready.ga.gov/be-informed/tornadoes 

http://emergency.cdc.gov/disasters/tornadoes 

http://www.redcross.org/prepare/disaster/tornado 

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