New Mortgage Loan Changes Coming in August

Homeownership is a rewarding and life-changing experience. For those who have purchased a home and have gone through the loan process, you may recall the seemingly-endless forms.  Regulators are moving to make it easier for consumers to understand the complex, financial aspects of the loan.

Beginning August 1, 2015, changes are coming to the mortgage lending process. These changes (TILA and RESPA), which Academy Mortgage is referring to as “TRID”, include two integrated disclosures:  the Loan Estimate (LE) and the Closing Disclosure (CD).  These new disclosure forms have been extensively tested in focus groups to assure greater clarity to the consumer.  

• 1.  Loan Estimate form (LE): The mortgage industry has provided borrowers with a Good Faith Estimate (GFE) and an initial Truth-In-Lending disclosure (“early TILA”).  The GFE and “early TILA” forms will be combined into one new form, called the Loan Estimate (LE).  The purpose of combining the previous forms into the new Loan Estimate is to help borrowers better-understand key features, costs, and risks of the mortgage for which they are applying.

• 2.   Closing Disclosure form (CD):  This form will be created to combine the HUD-1 and the final Truth-In-Lending disclosure.  The new Closing Disclosure form must be provided at least 3 business days before the consummation of the loan.  Depending upon the method of delivery to the borrower, another 3 days may be required to ensure proper disclosure.  This change and others will have an impact on the industry and the timing of transaction closings.

 Have questions about the new mortgage loan changes? We can help! Click here to contact us.

Home Renovations That Can Help (Or Hurt) A Sale Price

Home renovation can be tricky. Most people make renovations to please themselves, but those renovations don’t necessarily make the home more valuable in terms of its sale price. The money that was sunk into the renovations might not be recouped when it’s time to sell. On the other hand, some people make renovations to please themselves, but also with a view to improving the home’s sale price if they decide to put the home on the market at a later date. But what renovations are the most valuable in terms of resale value?

1) The Kitchen

In virtually any home, the number one renovation that improves resale value is modernizing the kitchen. This is particularly true in an older home that hasn’t been updated, but most homes built last century will benefit from a kitchen remodel. Unless the kitchen needs a serious update, even a few hundred dollars spent can up the home’s resale value considerably. Fix leaky faucets and make other minor repairs, add a fresh coat of paint, new curtains and light fixtures, and updated cabinet hardware. Minor additions like these give the kitchen a fresh and clean look that makes it feel new even if it’s not.

2) The Bathroom

The same principles apply in the bathroom—kitchen and bathroom are typically the two rooms that buyers want to see are clean, modern, and well-maintained, so these are the rooms where a little money spent can have the greatest impact. Fresh paint, new faucets and fixtures, resealing the bathtub and sink, updating the mirror and vanity, can all make a big impression.

3) New Paint

A fresh coat of paint in key rooms ups buyer interest, and it’ll make a particularly big difference if your current home’s color scheme is bright, unfashionable, or otherwise undesirable. Neutral colors are best, because they’re not distracting, and they help potential buyers envision what their possessions will look like in the space.

4) Spruce up the Outdoors

A tidy garden adds curb appeal, and it can add value too, simply because it helps show the house off to good advantage. Prune trees and bushes and put things in order, and perform any minor maintenance tasks like cleaning gutters.

5) Add a Bedroom

Adding a bedroom isn’t exactly a minor renovation—unless you already have that room in the house. If the house has a den or an extra living room that’s suitable for conversion, on the other hand, adding a simple closet system instantly converts that den into a bedroom, and can add a healthy chunk to the sale price.

Renovations That Don’t Add Value

There are also a few renovations that many people believe add significant resale value to a home, but actually aren’t all that valuable. An article at Forbes.com pinpoints half a dozen examples that, while they’re expensive to install, tend not to pay for themselves when it comes time to sell up.

• Swimming pools: they’re fun when you’re at someone else’s house, but the effort they require to maintain means that many people just don’t want one at their own home.
  
  
• Overbuilding: when you overbuild in comparison to other homes in the neighborhood, the lower value of the surrounding homes drags down the value of yours.
  
  
• Landscaping: A well-kept yard is a winning bet, but an extensive garden isn’t, simply because many potential buyers are turned off by the heavy maintenance an elaborate garden requires.
  
  
• High-end upgrades: expensive touches like hand-made tiles or stainless steel appliances don’t necessarily add value if the rest of the home isn’t up to the same standard.
  
  
• Specific-use upgrades: A media room, or any other room with a highly specific use, may not add value, as most home buyers aren’t specifically looking for that particular feature. It’s also worth noting that upgrades like disability access features tend not to add value due to their highly specific nature, even if they cost a significant amount of money to install.
  
  
• Wall to Wall Carpet: Carpeting is one of those love-it-or-hate it things, and the difficulty of maintaining expensive carpeting means that many home buyers aren’t swayed by the idea of buying a home with new carpet. In fact, for a seller it’s usually more profitable to restore wood flooring than it is to install new carpet. Alternatively, instead of installing new carpet, treat your existing carpets to a deep cleaning.
  
  

Keeping Your House Show Ready

Having your house on the market while you’re living in it can be a stressful time. You still have to live. The dog still puts muddy prints on your freshly mopped floor. The kids still race down the hallway bumping into your freshly painted walls. Construction down the way still lays that fine layer of dust on your mini-blinds.

The best advice from people that instinctively know how to keep a house ready to show is:

• Clean as you go: As you’re cooking, give the counters a swipe with a damp sponge and don’t leave the dishes for later. While your home in on the market,later can become the next morning and then you receive a call while you’re at work that a very interested buyer only has today to look at your house, and now you're trying to figure out how to race home from work to wash those dishes. Put a squeegee in the shower and give the glass doors and walls a swipe every time you take one.
• Less is easier: Having less stuff means there is less to get out, so less to put away. When you’re house is showing, pack away all those knick-knacks that collect dust. Remove extra furniture so that cleaning the floor is easier.
• Use containers: Give your kids lidded containers for their stuff. At the end of the day, have them collect all of their things—toys, video games, iPods, etc.—and put them away in their container. They can keep it in their closet or you can stack them away in the laundry room…whatever works for your space.
• Use tricks: Okay, sometimes you just can’t keep everything clean all the time, so you have to resort to some quick ways to hide the mess. Cover furniture with blankets or throws to keep pet hair and kids messes off the upholstery. Then, you can just grab the blanket or throw, fold it up and hide it in the washer. Or, keep a Swiffer on hand to quickly gather up dust, pet hair or those muddy footprints.
• Have a plan: When you’re living with the constant need to have a clean home, you have to adjust how you think about cleaning. Many of us let the little messes pile up because we know we’ll get to it on the weekend. In fact, in many homes an entire Saturday morning can be set aside for cleaning. But when your house is on the market, you can’t let things wait for Saturday, so have a plan for just 20 minutes a day to pick up, put away, wipe down and surface clean.

Don’t sweat the small stuff

Your real estate agent knows that you’re living in the house. They can help you decide which are the big things that you need to concentrate on and which are the small things that won’t make a difference to a sale. We’re here to help, so ask us!