The extension and expansion of the popular first-time home buyer tax credit, home-price declines and low interest rates has drawn out qualified people seeking to sink their money into their first home. According to the U.S. News & World Report.
Mark Zandi, the chief economist at Moody's Economy.com, projects first-time home buyers will buy 1.84 million homes in 2010, up from 1.73 million in 2009.
For those who have never purchased a home before, here are some helpful tips from U.S. News & World Report to make sure you’re investing in a piece of financial security and not sinking into debt:
1. Check your credit report and score
Before you even think of checking out an open house, get a copy of your credit report. The cleaner your credit report and the higher your credit score, the more likely you are to be preapproved for a mortgage at a low interest rate. According to Keith Gumbinger of HSH.com, most home buyers will need a credit score of about 720 to obtain the most favorable mortgage rates.
If you review your credit report a few months before you start hunting for a house, you'll have time to make sur the facts are correct and dispute mistakes before a mortgage lender checks it. Access a free copy of your credit report at annualcreditreport.com once every 12 months.
2. Get preapproved
According to U.S. News & World Report, the second step to buying a home is establishing with a qualified lender how much you can afford. "First-time home buyers need to take the time to get an approval from their lender before looking at homes," advises Ray Boss Jr., a six-year licensed Realtor with RE/MAX Realty Group in Maryland. "This includes getting a credit check and giving their lender a copy of W-2s, pay stubs, and bank and brokerage statements."
Preapproval saves time because you’ll look at homes that you know you can afford instead of lusting after something out of your price range. It also will put you in a better position over another bidder with no preapproval.
3. Create a long-term budget
The housing crisis proved that mortgages were given to people who did not have the means to repay them. To avoid this mistake, home buyers should create a budget before even beginning their home search to determine just how much house they can really afford. A good measure is to devote no more than a third of your monthly household income to housing costs, which include mortgage principal, interest, taxes and insurance.
“A good number would be 30 percent,” Zandi says. “If you are over 35 percent, you are really pushing the envelope.” Several work sheets are available online to help calculate how your income, debts and expenses affect what you can afford each month for the next 15 or 30years.
4. Remember the hidden costs
If you don’t factor in the cost of taxes, insurance, utilities and fees, you may grossly underestimate what you can afford to pay each month. You need to consider paying closing costs, appraisal fees, escrow fees, homeowner's insurance fees, property taxes and even moving costs, as well as repairs and maintenance.
“When you’re renting and the furnace goes out, what do you do? You call the landlord,” says Tom Vanderwell, mortgage officer for Fifth Third Bank in Michigan. “When you own a house, what do you do? You have to fix it yourself.” You may find numerous “nickel and dime” expenses to account for that could add up to a significant chunk of money over time.
5. Use professional help
It is possible find and buy a home without the help of a professional real estate agent, but a good agent can save you much time and stress. For instance, Realtors have access to all the homes on the market through the multiple listing service, or MLS, plus all the ones that are under contract and have been sold. A specialist has time to sift through all of these listings, says Boss, and make the appointments to show you the houses, create comparative market analyses to determine proper pricing and meet with necessary inspectors. Real estate agents also can help buyers traverse a taxing, 70-page legal contract.
“I would want someone who is going to look out for my interests first and foremost,” says Boss. “Someone who knows the contracts, who has experience negotiating, and who can walk me through the entire process smoothly – step by step – and make sure I get the house that's right for me.”
Contact me for the entire list of tips for the first-time home buyer from U.S. News & World Report.
Tips make first-time home buyer less vulnerable
Colorado cities rank among least obese metro areas in the nation
Fort Collins/Loveland and Boulder are the slimmest and among the healthiest metro areas in the nation, according to the current Gallup-Healthways Well-Being Index.
The study reports that Fort Collins/Loveland's obesity rate of 16 percent is the lowest of any metro area in the country, but Boulder’s isn't much higher at 16.6 percent, making it the second lowest. Colorado Springs ranked fourth for having the least obese residents at 17.2 percent, and Denver/Aurora tied for 10th at 19.3 percent. Colorado and California had the most metro areas - four each - among the 10 least obese.
Gallup calculates Body Mass Index (BMI) results using respondents' self-reported height and weight. Americans with a BMI of 30 or above are considered obese. Gallup polled adults aged 18 and older in 187 metro areas in 2009.
America's 10 least obese metro areas boast an average obesity rate of 18.7 percent – 15.1 percentage points lower than that of the nation's 10 most obese places and significantly better than the national average.
Among the 10 least obese metro areas, Boulder stood out as it performed the best across the board on Gallup and Healthway's indexes measuring healthy behaviors, community conditions and physical health. Residents there are among the most likely in the country to get frequent exercise, and at 5 percent, are among the least likely of citizens in any of the 187 metro areas surveyed to have diabetes. To compare, the metro area with the highest level of reported diabetes is McAllen/Edinburg/Mission, Texas, at 18.9 percent. It is also worth noting that Boulder tops all U.S. metro areas in overall well-being.
Gallup sites healthy behaviors as the common denominator among residents of the 10 least obese metro areas, as nine of the 10 areas rank in the top third of the Gallup-Healthways Healthy Behavior Index, which measures exercise, eating and smoking habits. Majorities of residents in each of the 10 least obese places report that they ate healthy "yesterday," eat fruits and vegetables frequently, and exercise regularly. Half or more of residents in all of the least obese areas report exercising for at least 30 minutes three or more days per week. This stands in contrast to the nation's 10 most obese metro areas, where in all but one less than half report exercising at the same frequency. Smoking rates are also lower than the national average across all but one of the least obese areas.
Conditions within a community also play a major role in the number of obese residents. The Gallup-Healthways Basic Access Index finds that residents in almost all of the nation’s least obese metro areas report above-average levels of access to affordable fresh fruits and vegetables, having a safe place to exercise, having enough money to buy food and having health insurance.
All of the least obese metro areas in the U.S. have diabetes levels lower than the national average as well as fewer heart attacks – a result of eating healthier and exercising.
According to Gallup, Boulder and the nine other areas that accompany it as the nation's 10 least obese places can serve as examples from which other communities can learn. Still, even the 16 percent obesity rate in the least obese place in the country as recorded by Gallup today is slightly higher than the obesity levels reported by the government in the United States in the 1980s, suggesting that the country has a long way to go to reverse the enormous increase in obesity rates of the past 30 years.
Sunshine brings lighting expert to Boulder and eventually to open business
Cheryl Gaiser loves light – inside and out.
It’s Colorado’s 300 days of the sunlight a year that brought her to Boulder from one of the rainiest states in the union 14 years ago. And it was her love of creating light indoors – a family tradition – that led her to open a lighting studio.
Cheryl, Jack Rietveld and Rhonda Wade established Inlighten Studios 10 years ago in October on the west end of Pearl Street. After Jack passed away a few years back, Rhonda took over as president to oversee operations, allowing Gaiser to remain vice president and handle the sales end of business.
“My family has been in lighting for over 60 years, and I’ve been doing it for more than 30,” she says. “I really do like being in front. I used to sell to people just like me. It keeps me in an industry I’ve grown up in and I really do enjoy it.”
Just three years ago, Cheryl and Rhonda moved the business to its current location at 5345 Arapahoe Road, Unit 4. They’ve also diversified, expanding their services and products into commercial work, as the residential lighting business began slumping with the housing market and economy.
“During the housing crunch we went after more commercial business and landed that, and that has kept us afloat,” Cheryl says.
Inlighten Studios works with designers, architects and contractors to fulfill the homeowners' lighting needs, she says.
“When you walk in, our first question is, ‘What is the application? Where do you plan on using this?’” Cheryl says, noting any employee can then help customers determine the right lighting. “Every employee who has worked here has had to go through the American Lighting Association course and passed it.”
For Cheryl, who has spent much of her life in the South, Boulder has been an adjustment, especially to the cold. But it offers plenty of outdoor activities in which she participates wholeheartedly. And between her business and the sun, she never lacks for light.
“It’s worth it for the sun for me,” she says. “I love it here.”
For more information about Inlighten Studios, call (303) 449-9899 or visit www.inlightenstudios.com.
State appliance rebates starting soon
If you plan on buying a new appliance or two this year, you've picked the right time.
The state of Colorado is tentatively scheduled to implement a mail-in rebate program to help residents replace older, inefficient appliances with ENERGY STAR® qualified appliances in March. The program will continue until the state runs out of the more than $4.7 million set aside for the rebate.
Eligible products include:
• Refrigerators
• Clothes washers
• Dishwashers
• Gas storage water heaters
• Gas, tankless water heaters
• Gas furnaces
• Gas boilers
Check with state officials for information on proper recycling or disposal of appliances. For more information about this and other rebates, visit http://www.colorado.gov/energy/index.php?/resources/rebates-for-program-participants.
Boulder happiest, healthiest city in the U.S., according to study
If you’re looking to escape your worries and find happiness, you’re living in the right place.
According to the Gallup-Healthways Well-Being Index, which interviewed more than 353,000 Americans last year, Boulder is home to the healthiest, happiest people in the nation.
In fact, most of the highest-scoring cities were in the West – such as Boulder, which topped the list. On the other end of the spectrum, most of the lowest-scoring cities were in the South, such as Huntington, W.Va., which ranked last out of the 162 large and mid-sized cities in the study, according to an article about the study in USA Today.
The study asked individuals to assess their jobs, finances, physical health, emotional state of mind and communities to provide a city-by-city portrait of the nation’s mood and a potential tool for policymakers, the article says.
Of the 10 cities that scored best on “life evaluation” – assessments of life now and expectations in five years – nine of them are home to institutions that supposedly provide some buffer from recession - a major university, a big military installation or a state capitol.
Boulder was the only Colorado city ranked among the top 10, although the three others on the list were among the top 60. Four cities from California, two in Utah and one in Hawaii all represented the West in the top 10. Only the Holland, Mich., and Washington, D.C., metro areas are located in the Eastern or Central time zones, according to USA Today.
The majority of the bottom 10 cities are in economically embattled regions: three are in the Alleghenies and three in the Rust Belt. Only Shreveport, La., and Modesto, Calif., are west of the Mississippi.
Besides its mountainous setting, with a greenbelt of public lands circling the city, Boulder’s jobless rate of 5.7 percent, compared with the national 9.7 percent, may help its residents remain happy and healthy, according to the article.
Here’s a look at how Colorado cities fared in the study:
Smaller remodeling projects generate the most returns for homeowners
If you’re considering doing some remodeling of your home, beware that, according to Remodeling magazine’s 2009 Cost Vs. Value Report, you’re not likely to recoup 100 percent of your investment upon selling your home with nearly any project.
However, the report shows that smaller midrange projects, such as adding a wood deck (80 percent), replacing the front entry with a steel door (128.9 percent) or remodeling the attic into a bedroom (83.1 percent), will get the most returns in the Mountain states, including Colorado.
The projects generating the smallest returns, in contrast, include a home office remodel (48.1 percent) and a sunroom addition (50.7 percent). Among the upscale projects, replacing siding with fiber-cement products generated the highest returns (83.5 percent), while homeowners adding on a master suite recovered only 55.7 percent of their investment.
Here’s a look at some of the different remodeling projects, their costs, their resale value and the cost recouped, according to the 2009 Cost vs. Value Report:
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