The Costly Free Credit Report

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All of our Edmond, Oklahoma and Greater Oklahoma City friends, family and neighbors have seen the commercials for freecreditreport.com.  I’m here to tell you it’s not free.  This service offers you a free report with little information and tries to sell you on a trial membership that quickly converts into a monthly payment of about $20 for something you do not need.  To get that report you have to sign up by creating an account, paying a fee, and if you read the fine print you’ll learn you will accrue additional charges (to of all places, your credit card) if you neglect to cancel your membership within a few days of opening the account.

Never fear.  You do have the right to see your credit report at no charge, every year, from each of the three credit reporting agencies without going through one of these bogus services that want you to believe they’re doing you a favor by charging you for something that already rightfully belongs to you.  The problem is if you go directly to the Experian, Transunion, or Equifax websites they will try to sell you a very similar trial membership that operates much like freecreditreport.com’s program.

Here’s how you get your truly free report, no charge, no membership, no gimmicks:  Go to annualcreditreport.com and look for the “Start Here” box.  The rest, as they say, is up to you.

Outside-In Fall Showing Tips

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Children will be heading back to school soon, and shortly after that summer will wind down into fall.  Your Edmond, Oklahoma or Greater Oklahoma City home is already on the market, or soon will be, and you need to prepare for autumn showings.  Here are a handful of helpful tips to make sure your home is in tip top shape for home shoppers in the months of September through November.

1.      Curb appeal.  Keep leaves swept or raked up and walkways clear of natural debris.  Prune/trim hedges and trees.  Make sure your first impression is a good one.  Well maintained exteriors give buyers every reason to expect the same on the inside.  Poorly maintained exteriors may keep potential buyers from coming inside at all.

2.      Make sure gutters are clear of leaves and all downspouts are working properly, directing rainwater away from the foundation.

3.      Entryway.  Add a little splash of color at the front door like a holiday wreath, or fall pumpkins and gourds, making your entryway more inviting.  Clear away toys, bicycles, and that pile of ignored newspapers.

4.      Keep interior warm and comfortable.  If temperatures drop outside, make sure your home’s interior is warm and comfortable.  Comfortable homes invite buyers to take their time viewing your home and imagining themselves living in it.  The discomfort of a cold home can send buyers to grabbing their coats and moving on to the next house.

5.      Decorate your interior with emblems of the season like a Thanksgiving or autumn themed centerpiece on the dining room table or on the mantle.

6.      Keep backyards, patios and decks clear of fall leaves.  Show potential buyers a clean and safe backyard they can easily picture their own children playing in.

Home Maintenance Mistakes

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Every Edmond, Oklahoma and Greater Oklahoma City homeowner learns how to fix the more common home repairs that come up in day to day living.  It’s unavoidable.  When you own a home things inevitably break, peel, burn out, chip, plug, run, and leak.  If you’re a relatively new first-time home owner give it some time and you too will learn “on the job.”  Many of us actually enjoy taking care of the little inconveniences ourselves, saving a few to a few hundred dollars by repairing things ourselves instead of hiring a handyman every time something requires fixing.  Then there’s those few who bite off more than they can chew, diving in head first, taking things apart with no thought how to get a project to the finish line…That’s another story.

Today I want to address two issues that come up for folks at the opposite extreme, those who unintentionally or otherwise overlook looming home maintenance issues that can be just as costly as they are easily avoidable.  It all starts with water:

1.      Don’t water your foundation when you water your lawn.  Whether you have an in-ground system or you’re moving the hose and sprinkler around the yard from spot to spot yourself be sure to keep the fan of water away from your home’s foundation.  Water all too easily travels down the side of a foundation and into basement and crawl spaces.  Likewise be sure downspouts are clear and functioning properly, and are directing rain away from the house.

2.      Clean out your gutters.  Okay, maybe it’s a little early to be talking about leaves in gutters, but make no mistake, ignoring anything that can plug the top connector to downspouts can result in overflowing gutters.  Water spilling over gutters soaks soffits and can get in between the exterior and interior walls.

Take a few extra minutes to follow these easy guidelines and you could save a few hundred (or thousand) dollars in water damage.

Good Fences Make Good Neighbors

Have you ever heard that saying, “Good fences make good neighbors?”  Nowadays installing that new fence has the potential to cause hard feelings, misunderstandings, even litigation.  Here are a few tips when putting up a new fence to help you stay on your Edmond, Oklahoma or Greater Oklahoma City neighbor’s good side.

1.      Follow zoning regulations, and if you have a Homeowners Association check your bylaws and speak with officers to be sure the fence you’re planning meets all standards.  HOAs generally have final say on style, heights, etc. so it pays to check first.

2.      Do NOT construct your fence across your property boundary and into your neighbor’s.  You would think this one only makes sense, right?  Better to remind you of something you already know than to assume and find out you have to, at your own expense, tear down and rebuild.  Be sure to obtain plat maps or a new survey with clear boundary lines, then build within those boundaries.

3.      Talk to your neighbors.  Not that you’re giving them a say-so on design style (that’s the HOA’s job), but it is nice to float the idea past them for the sake of good will.  This also gives you the opportunity to discuss any potential property line issues and resolve them before construction.

4.      Maintain both sides of the fence.  You built the thing, now make sure you keep it in good condition.  Don’t force your neighbors to look at a weathered finish or deteriorating structure.

Beyond the Deposit

If you’re a first time home buyer, just because you’re pre-approved for a mortgage and you have enough money saved to meet the down payment the loan officer quoted you, don’t be fooled into thinking that’s all you need to be able to afford that new Edmond, Oklahoma or Greater Oklahoma City dream home.  There are many other costs involved in purchasing a home – some hidden, some obvious – that all need to be accounted for when budgeting for your big move.

Deposit:  Also referred to as earnest money deposit.  Each local market has its own custom.  As the deposit is submitted with your offer to purchase, the larger the deposit the stronger your offer is generally received by the seller.  Consult with your Realtor.

Down payment:  Depending on the loan product you go with you’ll need 3.5% of the purchase price for a down payment with an FHA loan up to as much as 20% with some conventional loans.

Appraisal:  Whether your appraisal is paid for up front or out of closing costs you can expect to pay $400 or more for an expense your mortgage lender will require.

Inspections:  A home inspection goes upwards of $350, and if you are in a location with common pest problems, or are on a well you may have those additional inspections expenses as well.

Fees and title insurance:  These are two of those often overlooked expenses, mostly since people frequently pay less attention to them because they’re perceived more as numbers on closing documents and less like cold hard cash.  The truth is you are still paying for these, albeit over the course of the loan, and that means additional interest paid too.

Cash reserves:  Any new home will have ongoing upkeep and maintenance expenses associated with it, less so for new construction, more so for older existing homes.  Also, as a first time home buyer you may never have had the need to purchase a lawn mower, snow shovels, sprinkler or water hose.  What other items will you need now that you’ve graduated from renter to homeowner?

Before You Hire a Realtor

Ever wonder if that Realtor you hired is really qualified to help you with the most important purchase of your life?  Did they make many promises to you but keep too few of them over the course of the transaction?  Next time you’re interviewing Realtors to help you buy or sell an Edmond, Oklahoma or Greater Oklahoma City home take this handy list of interview questions along on your appointment.  I guarantee the exercise will pay off in one of two ways.  Your candidate’s answers will either raise some potential red flags or they will help you gain a new level of confidence when embarking on a promising new business relationship.  Here we go:

1.      How long have you been a Realtor?

2.      Is this your only and full time job?  Do you really want to work with someone who’s just kicking the Real Estate tires so to speak?

3.      What additional professional training have you received?/What professional designations do you have?

4.      Can I call your clients with the most recent completed transactions for referrals?

5.      How will you market my home?  Important here to understand how your candidate will use technology, especially the internet to promote your home.  A yard sign, open house, and standard MLS listing just won’t cut it nowadays.

6.      What percentage of asking price are your listings actually selling for?  This will help you determine the candidate’s skill in initial pricing of homes.

7.      What was the average days on market for your listings?

8.      How will you communicate with me during the course of a transaction?

Some questions don’t necessarily have right or wrong answers, but in the asking you may gain a little better understanding of your own expectations.

Before You Buy

When you pay monthly rent for your apartment or rental house do you ever feel that it’s like watching money go down the drain?  Sure, you’re getting a roof over your head but what else?  Wouldn’t you like to build some equity, or take advantage of the mortgage interest tax deduction on your income taxes.  Home ownership is a great way to make headway with taking control of your financial future.  Yet maybe you’re not sure if you’re ready for the expense or commitment of owning your own home.  Buying your first home is stressful, both emotionally and, yes, financially.  I’m here to tell you it doesn’t need to be.  Here are a few great tips on what first time home buyers need to consider before making the purchase and how to evaluate their readiness for taking the plunge.

1.      Needs and wants.  Take the time to make a Needs/Wants list.  List everything you absolutely need in a new home under the “Needs” column.  This might include desired school district or minimum number of bedrooms and/or bathrooms, or a certain square footage.  In the want column put those features and benefits that you really want but that are not necessarily deal breakers if you don’t get them.  For example you might really want a two-car garage, though you only absolutely need space for one car.  You may really want a fenced in back yard so you can get a dog, but is it really an absolute necessity if you don’t yet own a dog and it keeps you from getting into your Edmond, Oklahoma or Greater Oklahoma City dream home?

2.      What kind of mortgage do you qualify for and how much can you actually afford?  Talk to a mortgage lender, get pre-qualified for a loan (then get pre-approved before starting to shop).  Find out how much you qualify for and what those payments might look like.  Compare the numbers the loan officer gives you with what you’re currently paying for rent.  Then ask yourself the million dollar question, “How much can I really afford?”  Here’s a comprehensive article covering all the costs involved in buying a home including purchase price, financing, moving costs, inspections, and much more!  Get as clear a picture as possible on your finances before you jump feet first into the Real Estate Market.

Mortgage Market Update

Mortgage rates have begun to tick up.  Here’s a look at last week’s nationwide averages for rates, points, and changes from the week prior.

30 year fixed rate mortgages (FRM) came in at 4.39% with 0.7 points.  That’s up .08% from last week, but 0.1 points lower.

15 year FRMs came in at 3.43% with 0.7 points, .04% higher and 0.1 points lower respectively.

5/1 year adjustable rate mortgages (ARM) were at 3.18% with 0.6 points.  The week prior they were at 3.16% with 0.7 points.

The 1 year ARM was the only rate on average that dropped from the previous week.  It came in at 2.64%, 0.01% lower than previously, with points remaining unchanged at 0.4.

Financial Planning for Your Home (Part 2)

Continued from last blog:

Insurance.  Be sure your home is neither under nor over insured.  Too much insurance and you’re wasting your money on inflated premium payments; too little and you’ll find yourself unable to rebuild after a catastrophe.  The key with home insurance is for your basic policy to have a full replacement coverage clause, meaning no matter where home resale values are in your market your insurance will cover the cost to restore your belongings and rebuild your home at current construction rates.  Be sure to obtain additional coverage if necessary to address issues like flood insurance, or to cover some luxury items that may not be covered by your standard policy like expensive jewelry and furs.

Repairs versus renovations.  How much can you expect to recoup on that kitchen remodel when you sell your Edmond or Greater Oklahoma City home down the road?  Are you prepared if your water heater, furnace, fill in the blank goes belly up?  Know the relative lifespans of the major systems in your home and budget 1% to 3% of your home’s value for annual repairs.  Likewise consult this handy cost vs. value report prior to committing to home renovations.

Property taxes.  Have you ever noticed that taxes always seem to go up and never down?  The same can be said of property taxes.  As part of your home’s financial plan it’s important to keep current on property taxing trends in your market.  Whether you’re mortgage servicer collects escrow money to pay for taxes on your behalf or you’re writing the check yourself you need to be aware not only how much you are paying every year, but how much your property taxes are increasing year to year.  If similar homes in your area are being taxed less than what you are paying you may be able to petition and get a reduction.  Also, don’t forget, property taxes on homes are generally tax deductible on your federal returns.  Make sure you are taking advantage of every deduction you qualify for.