This Neglected Home Repair Can Cost You $100 or More a Year

This Neglected Home Repair Can Cost You $100 or More a Year

The U.S. Environmental Protection Agency says one in 10 homes has a leak that wastes at least 90 gallons of water per day. Given the average cost of water, that adds up to more than $100 a year.

“Easy-to-fix household leaks waste more than 1 trillion gallons of water annually nationwide, which is equal to the amount of water used by more than 11 million homes,” said EPA Acting Assistant Administrator for the Office of Water Nancy Stoner.

In just 10 minutes, you can give your home a water checkup. Start by looking at winter water bills and fixtures for water waste, then twist and tighten pipe and hose connections. Consider replacing broken or inefficient fixtures with WaterSense-labeled models, adjusting water pressure, and softening well water. If winter water usage for a family of four exceeds 12,000 gallons per month, it’s likely your home has a leak problem. Here are some easy tips for finding and fixing it:

§  Check toilets for silent leaks by putting a few drops of food coloring in the tank at the back and, if after 10 minutes color shows up in the bowl before flushing, it may be time to make an easy repair and replace the flapper.

§  Check outdoor plumbing and hoses for damage from winter frost and tighten connections at the water source.

§  For in-ground sprinkler systems, have a professional certified through a WaterSense-labeled program inspect sprinkler heads and pipes for signs of leakage.

§  Check additional plumbing and outdoor fixtures for leaks. They may just need a quick twist or pipe tape.

Getting a Tax Refund? Consider Using It for Your Down Payment

Getting a Tax Refund? Consider Using It for Your Down Payment

While most people dread tax time, if you are getting a refund, this time of year can seem almost as rewarding as end-of-the-year bonus season.

Whether you are receiving a refund of a few hundred dollars or several thousand dollars, if you’re contemplating buying your first home, you may want to deposit your refund into an account dedicated to your down payment fund.

“Using your tax refund as a portion of your down payment can be a great idea,” said Clint Madison, a senior mortgage adviser with Envoy Mortgage in Walnut Creek, CA. “The more you put into the down payment, the less you have to borrow.”

How Much Will You Get, and How Much Do You Need?

According to the IRS, the average refund for 2013 tax returns was $3,013 as of March 24, slightly higher than the average for 2012 tax returns. A tax refund of $3,000 can go a long way to a down payment on a home, particularly if you’re using an FHA-insured loan to finance the purchase since you would need just 3.5% of the home price for the down payment.

The required down payment on a median-priced home, which the National Association of Realtors says was $189,000 in February, would be $6,615 with an FHA loan. If you opt for conventional financing, you would need at least $9,450 for 5% down, $18,900 for 10% down, or $37,800 for a 20% down payment.

“Putting down 20% eliminates the extra cost of mortgage insurance,” Madison said. “Even a more modest 10% would improve negotiating power and can provide better interest rates than a lower down payment.”

Rich Arzaga, a certified financial planner, founder and CEO of Cornerstone Wealth Management in San Ramon, CA, says that since tax refunds are relatively small for most people, a refund may not be large enough to rely on as a centerpiece for the down payment.

“If you’re planning a few years in advance and you view tax refunds as a forced savings account, then saving two or three years’ worth of refunds along with savings from monthly discretionary cash flow is a serious way to help fund the down payment for a home purchase,” Arzaga said.

Is a Tax Refund Actually a Good Thing?

Arzaga pointed out, however, that the best tax refund is no tax refund.

“Most people view a tax refund as getting something back from the government,” Arzaga said. “Emotionally, it feels good. But practically, the taxpayer is getting the worse part of the deal by having the government give back the excess payment with no interest payment. The time value of money and the power of compounding make collecting the additional income and saving over time in an interest-bearing account a better deal.”

Other Uses for Your Refund

You may be tempted to use your tax refund for a splurge, but one of the best ways to accelerate your savings and improve your finances is to take “found money”—such as a tax refund or an unexpected bonus—and put it directly into your savings or to pay off debt. Before you do anything else with your refund, make sure you have at least a minimal emergency fund to cover your expenses for a few months or to pay an unanticipated bill.

If you have an emergency fund in place, then putting hundreds or thousands of dollars into a fund for your down payment, closing costs and cash reserves for home maintenance can be a great way to put you on the fast track to homeownership.

“First-time buyers will realize an even bigger tax refund in the next year because they’ll have a new write-off in the interest paid on their mortgage,” Madison said. “Add this to the prospect of equity gained through homeownership and it’s a win-win.”

Should You Buy a Home After a Divorce?

Should You Buy a Home After a Divorce?

Going through a divorce isn’t an easy process, and once you’ve finalized, it’s natural to want to get your life back on track as quickly as possible. For many people that includes finding a new place to call home, but there is a lot to consider before you decide to buy.

Take a hard look at your finances—and your life—to find the best fit for you.

Should You Rent or Buy?

Both renting and buying have advantages and disadvantages, deciding which is right for your lifestyle may boil down to one simple fact: Flexibility. If you plan to stay at your current job or don’t want to take your kids out of school to move later on, buying a house may make sense.

On the other hand, “Maybe being able to rent and be committed for one year at a time is more appealing to a recent divorcee,” said Joe Spisak, sales manager for Inlanta Mortgage Inc.

To help answer this question, decide where you would like to see yourself in five years. If you would like to remarry or take a new job, you may have to sell your house a few years down the line, likely before you build up much equity. If you plan to stay in the same area, buying may make more sense.

Did Your Divorce Affect Your Credit History?

A divorce can affect your credit score, a big factor in whether you can qualify for a new mortgage.

“During the divorce process, many times bills go unpaid or are paid late,” Spisak said. And even a few late payments can drop your credit score significantly.

Just finalizing your divorce can also have an impact. When joint accounts with longstanding good histories are split between spouses each of their credit scores may be lowered, Spisak said.

To find out where you stand, order a copy of your credit reports and scores from the three major credit bureaus—Equifax, TransUnion and Experian.

What is Your Debt-to-Income Ratio?

Qualifying for a mortgage has changed since the recession. Today, the majority of loans are Qualified Mortgages, following a set of rules enacted by the Consumer Financial Protection Bureau. According to the CFPB, your monthly debt (including your mortgage) cannot exceed 43% of your monthly pretax income to qualify. Any lender you choose will take a hard look at your debt-to-income ratio before approving you.

“If you are responsible for paying alimony, maintenance or the like, depending on how long this is supposed to go on for, it can and likely will be counted as additional debt above what shows up on the perspective borrower’s credit report—thus having an impact on the ability to qualify,” Spisak said.

On the flip side, if you are due alimony or child support each month, you can use the payments to bolster your income levels. However, you will need proof of receipt for any support already paid, and proof that the support will continue for a certain length of time, such as three years, Spivak said.

Taking the Plunge

If you decide that buying a home makes sense to you, getting pre-approved for a mortgageshould be your first step. “You are likely obtaining a no cost look and useful information to purchase now or in the near future. There is no negative to having this knowledge,” Spisak said.

Your next step should be locating a qualified REALTOR® who can help you find an affordable home and guide you through the rest of the home-buying process.

Must Have Items For When Disaster Strikes

Must-Have Items For When Disaster Strikes

You can’t prevent disasters, but you can take charge of how you respond if you’re prepared. The first step is putting together an emergency preparedness kit.

What should go in an emergency kit? Here are the basics:

Your Most Important Papers

If a flood destroys your home, you could spend weeks or even months just trying to re-create the essential documents you’ll need to get back on track. That’s why it’s critical to have backups of important papers, such as:

§  The deed to your house.

§  Proof of insurance.

§  Medical records.

§  Passports.

§  Social security cards.

§  A list of personal contacts.

Keep one set at home in a portable case that you can grab quickly. Keep another in digital form—either on a secure website such as Dropbox, on a memory stick, or, even better, both. And while you’re at it, use the opportunity to check whether your insurance is up to date.

“People often don’t know what their homeowners insurance policy covers, and most don’t cover flooding,” points out Rick Bissell, Ph.D., a professor of emergency health services at the University of Maryland, Baltimore. Find out what hazards your area faces, and make sure you’re protected against them.

Basic Items for Survival

Water: One gallon per person per day for at least three days, for drinking and sanitation; double if you live in a very hot climate, have young kids, or are nursing. Bottled water is best, but you can also store tap water in food-grade containers or two-liter soda bottles that have been sanitized. Factor in your pet’s water needs, too.

Food: At least a three-day supply of non-perishables and a can opener. Pack protein, fruit and vegetables, but make sure they’re in a form that stores easily, such as cereal bars and trail mix with dried fruit. Include some treats that have a long shelf life, such as Tootsie Rolls. Store food in pest-proof plastic or metal tubs and keep it in a cool, dry place.

Flashlights and extra batteries: “Candles are not recommended because there are many house fires caused by candles left unattended,” says David Riedman, a public affairs officer with FEMA.

Battery-operated radio: Red Cross radios are available at multiple retailers and online.

First-Aid Supplies:

§  Two pairs of sterile gloves

§  Adhesive bandages and sterile dressings

§  Soap or other cleanser

§  Antibiotic towelettes and ointment

§  Burn ointment

§  Eye wash

§  Thermometer

§  Scissors

§  Tweezers

§  Petroleum jelly

§  Aspirin or non-aspirin pain reliever

§  Stomach analgesics such as Tums, Pepto-Bismol

§  Laxative

Sanitation and Hygiene Supplies:

§  Moist towelettes

§  Paper towels

§  Toilet paper

§  Garbage bags

§  Plastic ties

§  Shampoo

§  Toothpaste and toothbrush

§  Deodorant

Additional Items:

§  Plastic sheeting, duct tape, and dust masks—in case you need to seal your home or shelter from airborne contaminants

§  A whistle to signal for help

§  Toys or other comfort items for kids

§  Cash

Update your kit as your needs change, and replace food and water approaching its expiration date. You might pick a specific time each year to check, such as before hurricane season in the south or after Thanksgiving if you live in the north.

These Landscaping Mistakes Can Make Your House Harder To Sell

These Landscaping Mistakes Can Make Your House Harder To Sell

Clumsy, neglected, and hodgepodge landscaping not only hurts your home’s curb appeal, it can cut the value of your property and make it harder to sell.

Real estate appraisers say bad landscaping is a buyer turnoff that can increase the number of days a property languishes on the market, which also hurts prices.

“I’ve been with clients who won’t even go into a house because of the bad landscaping outside,” said Mack Strickland, a Chester, VA, REALTOR® and appraiser.

Even more important, bad landscaping is a downer that hurts the way you see and enjoy your home.

Don’t let bad landscaping happen to you.  Here are the seven landscaping mistakes that bust, rather than boost, your home’s curb appeal.

1. Planting Without a Plan

Some landscaping choices, such as a line of begonias, will last a season; others, like trees, can last a lifetime. So, take time to plan and plot a yard that gives you maximum enjoyment and curb appeal.

For the design challenged, landscape architects are worth the investment ($300-$2,500 depending on yard size). They will render elevations of your future yard, and provide plant lists so you can install landscaping yourself.

2. Too Much Togetherness

Yes, planting in clusters looks way better than installing single plants, soldier-like, throughout your yard. But make sure your groups of perennials, shrubs and trees have plenty of room to spread or they will look choked and overgrown. Also, overcrowded landscaping competes with itself for food and water, putting the clusters at risk, especially during drought.

Google how high and wide the mature plant will be and then combine that info with the spacing suggestions on planting labels. At first, garden beds of young plants will look too airy and prairie-like. But within three years, your beds will fill in with room to grow.

Remember: First year it sleeps, second it creeps, third it leaps.

3. Zoning Out

Don’t be seduced by catalog plants that look gorgeous on paper but aren’t suited to yourhardiness zone. You will wind up with plants that die prematurely or demand winter covers, daily watering and other intensive efforts to keep them alive and well.

Check plant labels to see which hardiness zones are best for your plants.

4. More of the Same

Resist the design temptation to carpet-bomb your yard with your favorite plant or shrub, which will create a boring, monochromatic landscape. Worse, your yard will look great when your favorite flowers bloom, then will look drab the rest of the year.

Mix things up and strive for four-season color. For example, combine spring-blooming azaleas with summer-blooming roses and autumn-blazing shrubs such as burning bushes (Euonymus alatus). For winter color, try the red osier dogwood (Cornus stolonifera), a hardy shrub that sports bright-red branches in winter.

5. Refusing to Bury Your Dead

Nothing wrecks curb appeal faster than rows of dead or dying shrubs and perennials.Quickly remove your dearly departed landscaping from your front and side yards.

Spent plants that lived their natural lives are good candidates for a compost pile (if you grind them first, they’ll decompose faster). But if your landscaping succumbed to disease or infestation, it’s best to inter them in black plastic bags, then add them to the trash.

6. Weeds Gone Wild

Weeds not only wreck the look of your landscaping, they compete with pricey vegetation for water and food. Weeds also can shorten the life of brick, stone and pavers by growing in mortar cracks.

The best way to stop weeds is to spread a pre-emergent about three weeks before weed seeds typically germinate. If you can’t stop them from growing, at least get rid of weedsbefore they flower and send a zillion weed seeds throughout your yard.

7. Contain Those Critters

Deer, rabbits and other backyard pests think your landscaping is an all-you-can-eat buffet, leaving you with denuded branches and topless perennials.

If you’ve got a critter problem:

§  Plant deer- or rabbit-resistant varieties. Your local extension agent can provide a list of green things critters won’t eat in your area.

§  Install an electric fence around landscaping you want to protect.

§  Spray plants with critter repellent. After a hard rain, spray again.

Buying a Home With Unpaid Real Estate Taxes is Risky

Buying a Home With Unpaid Real Estate Taxes Is Risky

If you’ve been looking for a home but find yourself frustrated by high prices or the lack of homes on the market, you may find yourself lingering over ads for properties sold at a tax-sale auction. While all real estate transactions come with a “buyer beware” label, the warning sign should be larger when it comes to purchasing a property at a tax sale.

Tax Deed Sale Basics

Homeowners who fall behind on their property taxes typically are sent notices about the unpaid bill from their local government. The rules about how unpaid taxes are handled vary from one jurisdiction to another, but generally after a certain period of time these homeowners are charged interest on their unpaid taxes. The amount of interest charged is set by each state and then charged by the county government and can range as high as 12% to 24%.

If the property taxes go unpaid for a long time, such as a year or more, the local government has the right to “sell the taxes.” Investors are enticed to buy these tax liens, which are typically sold at an auction, because of the high return on investment.

When you buy the tax lien, you don’t immediately become the owner of the home. Instead, the homeowner has another opportunity to pay back their taxes. If the bill is paid, then you get your investment back and you also receive the interest owed on the taxes.

If the owners cannot or will not pay their tax bill, you eventually become the owner of the property for the price you paid for their tax bill.

While this may sound like a great deal—since you will get your money back and you will either receive interest on your investment or own a home—there are plenty of pitfalls to buying a home with a tax lien.

Not for the Novice Investor

The rules are complicated and different in every state, but in nearly every case you should expect to wait months or even years before you can take possession of the property, if ever. The owners could come up with the cash to pay their taxes, but even if they don’t, it can take a long time before the government gives up on getting the back-taxes paid and before a title company will issue title insurance.

As with any investment it is extremely important to know what you are buying. While you won’t be able to get into the home or have a home inspection, you should at least visit the property and make sure there’s a home on the land and that it hasn’t been destroyed by a fire or a storm. Research the local property records to check whether the tax bill was sent. Governments do make mistakes, and if it turns out the taxes were paid, you will eventually get your money back but you probably won’t earn any interest on it.

Remember that you will need money upfront to purchase the tax lien and that you need to be ready to compete against other bidders. Your cash could be tied up for months or years to allow the property owners a chance to keep their home, so be sure you are able to part with the investment for that much time.

If your main interest is finding a home to live in within a few months, a tax sale isn’t likely to achieve your goal. If you’re looking for an investment, be aware that you need to follow specific rules; and, be ready to take the risk that you will end up owning a property that could require significant repairs before it’s habitable.

Allergy Free Sleep in the Bedroom

Allergy-Free Sleep in the Bedroom

By Dave Donovan

For years we’ve known how important sleep is to our health, but when you suffer from allergies, sleeping can be a frustrating and less-than-refreshing experience. From everyday dust to more serious problems like bed bugs, there are dozens of irritations that affect the quality and soundness of one’s sleep. Luckily, most of these issues can be eliminated or prevented by following a few easy steps.

Step 1: Check the Bedroom’s Humidity

Humid air is a breeding ground for mold spores and dust mites, so if your bedroom’s humidity level is greater than 50 percent, then you need to do something about it. Using the air conditioner or a dehumidifier throughout the summer months will remove a lot of the excess moisture from the air and help you sleep better at night because dust mites and mold spores won’t be as active in the low-humidity environment.

Step 2: Use Bed Bug-Proof Bedding Encasements

Bed bugs and mites can quickly grow from a pesky nuisance to an all-out infestation and this will wreck havoc on you if you're an allergy sufferer. In addition, you’ll also find yourself suffering multitudes of nightly bites which produce red, itchy welts. To reduce the chances of bed bugs and other critters from taking up residence in your bedroom, cover your mattress and boxspring in bed bug-proof encasements and make sure they are sealed completely. For even more protection, bug-proof encasements are also available for pillows, comforters and other bedding products.

Step 3: Install Vent Filters

Changing the filter in your furnace on a regular basis is an important step in keeping your bedroom allergen-free, but in some cases, this isn't enough. Individual filters are available that are designed for installation over each vent. By adding this additional layer of filtration, you’ll stop even more allergens from entering your living space.

Step 4: Wash Your Bedding Often

If you suffer from allergies, then you should wash your bedding in very hot water every 10 days. The water needs to be between 120 and 140 degrees to kill any mites and/or allergens. You can also purchase specially-made detergents designed to eliminate allergens regardless of the water temperature if you’re looking to save money on your hot water usage.

Step 5: Get Rid of the Bedroom Carpet

The bedroom’s wall-to-wall carpet provides great hiding places for mites, excess dust and bed bugs. Get rid of it and install hard surface flooring instead and you’ll breathe much easier. You can use some throw rugs to help soften up the space if you prefer, but if you do, treat the rugs with an anti-dust mite powder or spray.

Step 6: Vacuum the Bedroom Frequently

Having a hard surface floor in the bedroom will make it easier to clean and vacuum, so do this often to help prevent the formation of dust bunnies. If you don’t already own one, you should consider upgrading your vacuum to one that features a HEPA filtration system because it not only traps the allergens but also filters the air as it exits the vacuum.

Step 7: Get Rid of Plush Bedroom Furniture

Bed bugs and dust mites love hiding in the crevices of plush furniture, so don’t keep any cushioned loungers or other items of furniture in your bedroom. If you must have additional furniture in your bedroom besides your bed, choose only leather, vinyl, wood or rattan furniture because bed bugs cannot live on the surface of these materials.

Step 8: Remove Dust Catchers From the Room

Bedrooms surprisingly have dozens of items that can collect and trap dust, from fabric drapes to books to stuffed animals. Get rid of everything that collects dust so your bedroom will be easier to clean and less likely to house dust mites. Instead of drapes, use vinyl vertical blinds or shades, but be sure you dust or vacuum them often as they can also collect dust if not cleaned on a regular basis.

Step 9: Place a HEPA Air Cleaner in the Room

Placing a HEPA air cleaner in your room will help remove a great amount of dust and allergens from the air. Choose one that suits the size of your bedroom and run it according to the manufacturer’s directions. You should also clean the appliance’s filter as recommended by the manufacturer to get the best results.

Suffering from allergies will cause you to have to make several lifestyle changes if you want to keep your reactions to a minimum. Since we spend a third of our life in our bedroom, this is one of the most important areas you need to keep allergen-free. Following these steps will help reduce the levels of dust or allergens in your bedroom so you can sleep easier and more soundly every night.

The Pros and Cons of Adding a Pool to Your Home

The Pros and Cons of Adding a Pool to Your Home

In general, building a pool is not the best way to add value to your home. You’re better off making physical improvements to your actual house instead of adding a pool to your yard.

However, a pool can add value to your home in some cases:

§  If you live in a higher-end neighborhood and most of your neighbors have pools. In fact, not having a pool might make your home harder to sell.

§  If you live in a warm climate, such as Florida or Hawaii.

§  Your lot is big enough to accommodate a pool and still have some yard left over for play or gardening.

Still, that’s no guarantee you’ll get a return on your investment. At most, your home’s value might increase 7% if all circumstances are right when it comes time to sell. Those circumstances include the points made above, plus:

§  The style of the pool. Does it fit the neighborhood?

§  The condition of the pool. Is it well-maintained?

§  Age of the pool. If you put a pool in today and sell in 20 years, you probably won’t recoup your costs, especially if the pool needs updating.

§  You can attract the right buyer. Couples with very young children may shy away from pools because of safety issues, but an older childless couple may fall in love with it.

But only you, the homeowner, can determine the true return on investment. A pool can add value to your quality of life and enhance the enjoyment of your home. You can’t put a price tag on that.

But we can put a price tag on how much a pool costs to build and maintain.

The Cost to Build a Pool

The average cost in the U.S. to install, equip, and fill a 600-sq.-ft. concrete pool starts at $30,000.

Add in details like safety fences (most states require them), waterfalls, lighting, landscaping, and perhaps a spa, and you’re easily looking at totals approaching $100,000.

Costs also depend on the type of pool you choose.

Gunite is the most popular in-ground pool. Gunite is a mixture of cement and sand, which can be poured into almost any shape. It has replaced concrete pools as the sought-after standard.

Fiberglass shells and those with vinyl liners fall on the lower end of the budget scale, but the liners typically need replacing every 10 or so years. Changing the liner requires draining the pool and replacing the edging (called coping), so over time, costs add up. Most homebuyers will insist that you replace a vinyl liner, even if it’s only a few years old.

Filtration and Heating

The filtration pump is the biggest energy hog in a pool system, so you want to get the most efficient pump possible. The good news here is that new, variable-speed pumps use up to 80% less energy than old single-speed pumps, cutting operating expenses dramatically.

At about $500, these cost more up front, but some local utilities offer rebates through participating pool dealers. You can further cut energy costs by setting the pump to run at non-peak times, when rates for electricity are lower.

If you’re planning to heat your pool, gas heaters are the least expensive to purchase and install, but they typically have the highest operation and maintenance costs. Many pool owners opt instead for electric heat pumps, which extract heat from the surrounding air and transfer it to the water. Heat pumps take longer than gas to warm the pool, but they’re more energy-efficient, costing $200 to $400 less to operate per swimming season.

Regardless of heating system, covering the pool with a solar blanket to trap heat and reduce evaporation will further lower operating costs.

Maintenance Expenses

All pools require that the water be balanced for proper pH, alkalinity, and calcium levels. They also need sanitizing to control bacteria and germs, which is where chlorine has traditionally entered the picture.

These days you have a variety of options, including systems that use bromine, salt, ozone, ionizers, or other chemical compounds that can be less irritating to skin. Chlorine remains the most popular because the upfront costs are reasonable, and you don’t have to be as rigid about checking the levels on a set schedule. But as far as your wallet is concerned, they all even out in the end.

In a seasonal swimming climate, budget about $600 annually for maintenance if you shoulder the chemical balancing and cleaning yourself; in a year-round climate, it’s more like $15 to $25 per week.

To save yourself the task of once-a-week vacuuming, you can buy a robotic cleaning system for between $500 and $800 that will do the job for you. In locations where the pool must be opened and closed for the season, add another $500 each time for a pro to handle this task.

Insurance and Taxes

A basic homeowners insurance policy typically covers a pool structure without requiring a separate rider, but you should increase your liability from the standard amount.

It costs about $30 a year to bump coverage from $100,000 to $500,000. Many underwriters require you to fence in the pool so children can’t wander in unsupervised.

In some areas, adding a pool may increase your annual property taxes, but it won’t necessarily add to your home’s selling price. For that reason, try to keep your total building cost between 10% and 15% of what you paid for your house, lest you invest too much in an amenity that won’t pay you back.