Financial Planning for Your Home (Part 1)

Your financial plan takes into account many variables that impact the financial health of your family.  There’s insurance for starters, including medical, home, car, and life insurance.  There’s also savings, including everything from rainy day, vacation, Christmas funds, to retirement accounts.  And these lists are by no means exhaustive as we haven’t even touched on income, expenses, or college planning.

Let’s talk about your Edmond or Greater Oklahoma City home for a moment.  Just as you and your spouse have a family financial plan in place that outlines how money and assets come in, go out, are saved, and are protected so too your home should have its very own plan.  The four main components of a home financial plan include mortgage, insurance, repairs and property taxes.  Let’s take a look:

Mortgage.  Are you pretty consistent about making your mortgage payment(s) on time?  You say you’ve never been late?  Are you in a position to pay a little extra every month to pay down that principle even quicker?  Try this worksheet to see how much in interest payments you can save over the life of the loan if you pay an extra $50, $100, $200 every month on your mortgage.  So, can you afford to pay a little more now to save a lot down the road?  Yes, with careful planning.  The question is should you?  That depends on issues like an easily accessible emergency fund and ongoing retirement account savings plans being in place first.

Tune in next time for Part 2 of “Financial Planning for Your Home,” where I’ll talk more about how insurance, property taxes, and home repairs are integral parts of your plan.

Window and Door Energy Ratings

Summertime is generally a great time for replacing windows and exterior doors in your Edmond or Greater Oklahoma City Home, and with the Federal tax credit available for installing qualifying energy efficient products the trend toward upgrading becomes even more attractive.  The key here is the products you purchase must qualify under the tax credit guidelines, so be careful.  Just because your new windows come with the Energy Star label does not necessarily mean they are automatically eligible for the $200 to $500 credit.  When purchasing new windows and doors you need to look at the white National Fenestration Rating Council label.  The nonprofit NFRC is the industry-recognized certifying body for windows and doors.  That label will give you 5 measurements including U-Factor, solar heat gain coefficient (SHGC), visible transmittance, air leakage, and condensation resistance.  However it’s the U-factor and SHGC numbers that are used in qualifying for the credit.

U-factor is the measurement of how good an insulator the window or door is with a number ranging from .2 to 1.20.  The lower the number the better insulator your product is.  To qualify for the tax credit your product must have a rating of .3 or lower.

The SHGC is a measurement of how much heat and solar radiation a window or door allows in.  The measurement can range from 0 to 1, and again the lower the number the better.  Your windows or doors must have a .3 or lower for the tax credit.

Keep in mind, the U-factor AND SHCG numbers BOTH must be at .3 or below to qualify for the tax credit.  Having one but not the other just won’t cut it.  Confused?  Read the entire article here for a more in-depth expert explanation on how to shop confidently for new energy efficient windows and doors.

4 Little Known Homeowner’s Insurance Discounts

I ran across this great article on Realtor.com about a handful of homeowner’s insurance discounts that many people are unaware of.  Check out the bullets below, and if you see any that you think might apply for you call your insurance agent to have a conversation about saving some money.  Here we go:

  1. Home security.  Many of you know about the discount you can often qualify for if you have a home security system for your Edmond or Greater Oklahoma City house, but did you know that some insurance providers also have discounts available for living in a gated community or simply using deadbolts on your exterior doors?
  2. Fire safety.   Check with your agent about discounts related to fire safety.  Some providers will give you a break for items like installed fire extinguishers, smoke detectors and fire alarms, sprinkler systems, and/or fire escapes.
  3. Home systems.  There are often discounts available if your home has newer electrical wiring, plumbing, hail resistant roofing, or fenced in and gated pools.  In many areas a fenced in pool is required by law.  Why not make sure you’re getting the discounts you already qualify for?
  4. “Good Customer” discounts.  Many providers have discounts available for seniors and for customers who purchase multiple policies (called bundling) like home plus auto.  Likewise, if you’ve never filed a claim against your policy and you’ve had that policy for ten or more years you may qualify for a break sometimes as high as 20%.

I guess the bottom line is you may not know what you already qualify for, AND it never hurts to make a quick phone call or shoot your agent an email and ask

Good Debt, Bad Debt – Controlling Credit Cards

Building your credit, and your credit rating has gotten trickier the last couple years.  Today it’s more difficult to get loans, especially mortgages, as lenders are more conservative with their lending practices.  Not only are you required to have a larger deposit/down payment (in most cases), but you’re going to need a pristine credit rating to have any chance of qualifying for the best rates out there.

Then there are your credit cards, which boiled down are also nothing more than a loan.  But where your mortgage is secured by your Greater Oklahoma City property itself, and is considered good debt, credit cards are unsecured loans and come fully loaded with some of the highest interest rates out there.  Thus credit cards equal bad debt.  You work every month to make your minimum payment, all the while accruing interest on any unpaid balance, and somehow the balance still grows.  So you ask yourself, why bother?  Why borrow?  You’ll just start paying cash for everything.  Might not be a bad idea, at least for the family consumables.  But there’s still that balance…

As with your health, exercising your credit is important in maintaining a healthy credit rating.  Conversely, adding a few bucks to your credit card balance every month is just like adding a few extra pounds to your middle, and both can lead to more problems down the road.  Here are a couple tips for exercising your credit card(s):

  1. Pay off the balance every month.  Do not spend more than you can comfortably pay back as soon as that monthly statement comes in the mail.
  2. Make more than the minimum payment.  The only thing a minimum payment does is give you the momentary peace of mind that the bill has been paid while the outstanding balance continues to accrue interest at an interest rate in the teens or twenties.
  3. Pay off your highest interest rates first.  Pretty self explanatory.  This decreases the rate at which you accrue interest.
  4. Keep your credit cards at home!  If they’re not in your wallet you won’t be tempted to use them on less than necessary purchases.

Kitchen Style on a Budget

How much do you have to spend?  Be honest.  When embarking on a remodel project it’s important to have a budget you can stick to, especially when your budget is tight.  Now consider the remodel project that’s more about adopting a new style than it is necessarily about updating appliances, etc.  No worries.  If you’re just plain sick of your Greater Oklahoma City kitchen that screams “vanilla suburbia” here are some kitchen remodel ideas with pictures to meet two different budgets.

The under $5000 budget:

  1. Salvaged with style!  Check out this salvage style reworking of a Massachusetts kitchen.  Yes, the homeowners splurged for some new appliances (sometimes you just have to), but all the accents are salvaged materials from years gone by.
  2. Repurposing and the utilization of antiques give this kitchen a comfortable old-world appeal.  Check out the antique cabinets!
  3. Here’s a great cozy and inviting family kitchen maximizing limited space to make sure there’s space for everyone.

The under $2000 budget:

  1.  Small, stylish, and yes, new appliances too.  Stainless steel, paint, and a butcher block counter top still all come in under budget!
  2. Has the finish on your cabinets faded?  Is your wallpaper yellowing and peeling?  Ask yourself, “Why not white?”  Check out how some simple white paint and a few accents transform this old kitchen into a brand new classic.
  3. Here’s one inspired by the great outdoors.  Add some new cabinet and drawer hardware and you and your new kitchen are off to a fresh start.

Appraisals on Track

Over recent years the number of Real Estate deals getting side-tracked or stalled by an appraisal that didn’t come in high enough to support the mortgage approval has skyrocketed.  Now, it seems, appraisals are starting to get back on track.

Let’s paint some context for the conversation first.  Appraisal valuations are based on similar Real Estate transactions in the local market that reached the closing table.  Similar in this case means many things.  First, an appraiser will look at your home’s characteristics, like, for example, style, number of rooms, number of baths, age, etc.  Let’s say you have a three bedroom, two bath ranch built in 1990.  The appraiser takes this data and finds similar homes (3 bed, 2 bath ranches built at or around 1990) to see what they sold for.  The key here is the more recent the sale, the more solid the comparison.  This is the basis for the valuation.  The basis for valuations can also start with square footage and build from there, but again this is just a starting point.

Let’s also say the furnace in your Greater Oklahoma City home is the original that came with the house when it was new, but the water heater was replaced five years ago, and your A/C is brand new from last year.  Further, let’s say your home has three hundred more square feet than most other similar ranches in the area.  The appraiser will assign positive and negative values to these variations; positive for a new A/C, negative for a twenty-three year old furnace.  Values are also assigned for more or less square footage, more or fewer bedrooms and/or bathrooms, etc.

Here’s where the appraisal valuations getting back on track comes in.  In an article this month by CNN Money, rising home prices and shrinking inventory are prompting appraisers to place valuations higher than in the last few years.  This means home buyers are having to come up with smaller down payments for purchases that until recently required the buyer to make up the difference in the contracted sale price and the valuation short fall.  This further means a greater percentage of contracted sales are actually closing at the closing table, a boon for the Real Estate market and the economy!

Moving With House Plants

Before the move:

  1. At least a week before moving day you want to make sure your Greater Oklahoma City house plants are free of pests.  If you discover you do in fact have bugs you still have time to treat the plant and get rid of the problem so you don’t have to take it along with you and your plant to your new home.
  2. Transplant your plants into non-breakable pots for the trip and avoid unexpected messy clean-ups along the way.
  3. Prune plants back for the trip so they are easier to move.  This works well for most house plants, except for ferns and succulents.

Moving day:

  1.  Last in.  If your plants are being stored in enclosed containers for the trip be sure there are holes poked in the top of their boxes.  Consider draping a damp cloth over leaves for the trip to help them retain moisture, and as with children and pets, make your plants one of the last things you load right before hitting the road.
  2. Along your travel route be careful to keep the moving vehicle interior from getting too hot or too cold.  If you’re moving during the summer be sure to park in the shade during rest stops.  For the winter, park in the sun to help keep the vehicle warmer while you’re inside visiting restrooms and purchasing snacks for the next leg of the trip.
  3. First out.  Just like making the plants the last thing you load prior to your departure, make sure they’re first off the van or truck when you reach your destination.  Get plants out in the open and watered, but be careful not to over expose them to the sun, especially if you’re new home is in a new climate.

Home Safety for Older Children

We’ve talked about safety measures you can take even before you bring your newborn home from the hospital.  We covered child proofing your Greater Oklahoma City home before your baby can crawl, and before he/she can walk.  Now maybe it’s a good time to cover some safety measures in and outside the home as we look forward to our toddlers becoming elementary schoolers, tweens, and beyond.

  1. Playgrounds.  Be sure to locate a neighborhood playground that has equipment appropriate for your child’s age, and that has a separate area for older children to minimize the chances of an innocent accident like an older and larger child colliding with your son or daughter.
  2. Automobile traffic.  Start early teaching your child how to cross streets, and to always hold an adult’s hand before crossing.  This goes for walking through parking lots too.
  3. Guns.  It never hurts to remind folks of safety concerns that should be common sense to everyone.  Lock UNLOADED guns in a gun cabinet, and hide the keys to the cabinet and any ammunition boxes where curious youngsters will never find them.  Lock ammunition in cabinets separate from guns for additional security, and use trigger locks on all weapons.  And whether you keep guns in your home or not, speak to your children about the dangers of guns, and that they are not toys.
  4. Stranger danger.  Children are very trusting little souls.  But they need to understand something’s wrong when an adult offers candy to a six year old from a parked car, wants to show them their brand new puppy up close, or asks for directions, etc.  Have the stranger danger talk with them, and consult these guidelines if you’re having difficulty starting the conversation.
  5. Design, discuss, and practice your fire escape plan.  Your children need to know what to do if they wake up in the middle of the night during a home fire.  Draw out your plan on a sheet of paper, then review and discuss it with the entire family.  Finally practice every step of what you’re preaching, from slipping out from under the covers of their beds all the way to meeting in the neighbors driveway.

Baby Proofing for Toddlers

Crawling on hands and knees is one thing.  Learning how to stand, get around upright on two feet, coupled with an all new access to everything within a toddler’s reach is something else entirely.  For toddlers you still want to start from the ground and work your way up – and that’s the key right there.  Look up, because that’s just what your toddler is thinking, how to get up, over, and on top of…Here we go.

  1. Tub time.  Although your toddler is still discovering their new found vertical talents, it’s not a time to let your diligence during tub time wane.  As with infants and newborns, never leave a toddler unattended in the tub, and really it’s not a good idea to leave them unattended anywhere in the bathroom while the tub is filling.  Secure toilet lids too.
  2. Kitchen safety.  Install a safety latch on the oven door, and keep pot and pan handles turned away from the front of the range top.  Also, it’s a good idea NOT to carry your child and hot food or beverages at the same time.  It takes only a millisecond for your little one to reach out to get a closer look at your steaming cup of coffee, accidentally scalding both of you.
  3. Install door stops to protect little fingers from getting crunched.
  4. Use safety gates to keep toddlers from going up AND down stairs.  Safety gates are great at limiting toddler movement around the house, and they’re a must for keeping little ones out of “off limit” areas and off stairs.
  5. Fire hazards.  Make it a standard practice to have a grill in front of the fireplace, especially while you have a fire going, and secure any matches or lighters in a cabinet with a child lock.

For a more complete list of toddler proofing tips for our Greater Oklahoma City neighbors check out this great article.