Lynn Rand's Blog
In many communities, homeowner’s associations, or HOAs, provide services to residents of the neighborhood. In fact, as many as 26 million homes are under the guidance of an HOA across the country. These community organizations can help ensure the neighborhood’s homes stay in good repair, residents treat each other respectfully, and agreed-upon rules are followed by all community members. But HOAs are not free. To be a member of a community with an HOA, you will need to pay a monthly or annual fee. So is the HOA worth having? Here are the benefits and drawbacks to consider if you’re shopping for a home in a community with one.
Benefits of an HOA
An HOA will provide amenities for you as a resident of the community. Sometimes, those amenities may include things like community swimming pools or a fitness center. They may be something as simple as enforcing rules about the upkeep of homes so the neighborhood looks nice. This, in turn, can help preserve the value of your property.
HOAs can reduce some of your responsibilities. Depending on the terms, they may cover lawn mowing and snow removal, or they may give you someone to call if your neighbor is letting his dog bark at odd hours of the night.
Finally, an HOA gives you a voice. These associations are run by boards, which are typically community residents, and those board members are supposed to listen to the needs and desires of community members.
Drawbacks of an HOA
On the other hand, an HOA does have some drawbacks. Sometimes, the rules, like rules about fencing in your yard or the color you can paint your home, may be detrimental to your goals. The cost is another factor to consider, as it will increase your overall cost of homeownership.
Depending on the terms of your HOA contract, it may be possible for the association to foreclose on your home if you fail to pay your dues and follow the rules. They can also spring assessments on the homeowners within the association if they lack the money to cover an expense, such as if the community pool needs to be renovated.
Finally, an HOA will often limit the rental of homes within its governance. If you need to move and don’t want to sell, you may not have the freedom to turn your home into a rental. If rentals are allowed, the HOA will have regulations about the rental agreements that you have to follow.
So is an HOA right for your needs? The answer truly depends on your goals for your home and your overall budget. Weigh the pros and cons, and then make a decision that fits you.
If you're renting a nice house, condo, or apartment, there's a good chance your monthly rent check is almost as much as a mortgage payment. Perhaps you've realized this and have been asking yourself why you're contributing to someone else's nest egg, instead of your own! If that sounds familiar, you may be ready to take the plunge into home ownership.
The other half of the equation is whether you're financially ready, and that would depend on a variety of things, including your credit rating, your debt-to-income ratio, and your ability to make a sufficient down payment on a new home. Although a 20% down payment is a desirable target to aim for, there's often a lot of flexibility on how much you're required to put down on a house.
One of the main reasons a 20% down payment is desirable is that it takes you "off the hook" for having to pay monthly private mortgage insurance (PMI). The second advantage of making a substantial down payment is that it reduces the principal amount of your loan, which, in turn, lowers your monthly payments even more. However, if you're ready to become a home owner, but can't afford a 20% down payment, you can often eliminate PMI payments earlier than scheduled by making extra principal payments. The bank or mortgage company you decide to work with can fully explain their policies and what your options are.
If you are interested in making the transition from renter to home owner, now's a good time to start talking to loan officers. If nothing else, you'll be educating yourself on the intricacies of buying a home. Working with an experienced real estate agent is another way to learn the ropes, so to speak, when it comes to the home buying process.
Other than the financial benefits of building equity in your own home, there are also a lot of practical advantages. If you're currently a renter, for example -- especially in an apartment building, duplex, or townhouse -- you're probably tired of the lack of privacy and the unwelcome noises you can often hear through walls, floors, and ceilings.
Becoming a home owner brings with it a pride of ownership and the ability to plant trees, bushes, and gardens on your own property. Depending on what's available in your price range, you can also enjoy your own private deck, screened in porch, or patio. Options for the kids (if you have them) include swing sets, sand boxes, and room to play backyard sports or run through a water sprinkler during the hot weather.
If you feel like you are ready to take the plunge into home ownership, the first step is to make lists of your requirements, your preferences ("wish list"), and financial resources. The next step is to find a good real estate agent to start showing you homes that fulfill your needs and check off as many items on your wish list as possible!
Technologies for home theater audio are rapidly changing. At one time if you wanted a good listening experience in your living room you have to spend hundreds on surround sound speakers, subwoofers, and receivers. Then, you had to run wires throughout the room and try programming your remote to make it all work.
While surround sound speakers are still a good option, there are other ways to experience quality audio in your home. In this article, we’re giving you a guide to choosing a home audio system that fits your needs and, more importantly, your budget.
The latest addition to home theater audio is the sound bar. These are slim, sleek speakers that usually come with a small subwoofer.
Sound bars come in several varieties. Some are plug-and-play, meaning you don’t need to worry about purchasing amplifiers or devices, you just plug them into your television via an HDMI cable or connect to your TV through Bluetooth and you’re done.
Other sound bars are more like bases that your TV sits on top of. Sound bases aren’t as popular as they once were, so there are limited options. Furthermore, they typically don’t include a separate subwoofer so they can lack deep bass.
The other benefit of sound bars is just how simple they are to use. Even the cheapest sound bars often come with Bluetooth, so you only have to worry about one outlet spot for the power cord.
For most homeowners who want sound quality far better than their television’s internal speakers can provide, sound bars are an easy way to vastly improve your audio experience without breaking your wallet.
Before buying a sound bar, try them out at a local electronics store to gauge what quality you need. You also might want to measure your television to find one that matches its width.
The classic home theater experience is a bit more complicated. However, you can often buy a “home theater in a box” which includes everything you need for an audio system.
Most commonly, you’ll find 5.1-channel surround sound. This means there are five speakers and one subwoofer included in the box. These systems have one central speaker, two speakers that are placed to the left and right side of the television, and two rear speakers. However, you can also find 7.1-channel systems which include two extra speakers.
Many “home theater in a box” packages include an audio receiver. However, if you already have one, your money will be better spent on buying a higher quality speaker system than replacing your receiver.
The downfall of buying a speaker/receiver package is that their quality is often only marginally better than a (much simpler and easier to set up) sound bar. To get the optimal experience out of a surround sound system, you’ll need to spend more and do your research.
So, if you have a high budget and want a dynamic, high-quality surround sound system, your best bet is to buy a quality receiver (usually somewhere in the $600 range) and then spend the bulk of your budget on speakers.
Because real estate is a people-oriented business, most agents are happy to answer questions and provide advice after the sale. Whether you've enlisted their help to purchase a house or sell one, your working relationship does not have to end the moment you sign the final papers.
Professionals in the real estate business are generally service-oriented and interested in cultivating ongoing client relationships. If you've been fortunate enough to find a real estate agent who exceeded your expectations, then they'll most likely be a resource you'll want to use down the road. Assuming you had good rapport and that you're satisfied with their service, here are a few solid reasons to keep in touch.
Reliable source of advice: When you consider the training, knowledge, and experience that a seasoned real estate agent has, having them as a professional contact can benefit you in a number of ways. As an example, many agents are familiar with the impact home improvements can have on resale value. In other words, if you're thinking about upgrading, expanding, or altering your property, a knowledgeable real estate agent can provide insights into how that might affect your home's current and future market value. Since every type of home improvement brings with it a potential return on investment (ROI), it's an important aspect to consider when remodeling, adding an addition, or making a major change to your property. Many real estate agents have cultivated relationships with dependable contractors, remodelers, and installers to whom they may be happy to refer you, too. As a homeowner, you will invariably need reliable recommendations, sooner or later, and real estate agents are often a great source of contractor referrals. As you may have already discovered, it can be a frustrating experience to try to find a good home improvement contractor or other service provider when you're starting from scratch or relying on the credibility of online reviews.
Help for friends and family: If you're not planning on buying or selling a home in the near future, there's a good chance someone you know would benefit from the help and advice of a proven real estate professional. Even if a family member or acquaintance just needs assistance in finding an affordable apartment or house to rent, real estate agents often have the connections and resources to provide options that others may have overlooked.
Income and Investment properties: After shelling out tens of thousands of dollars to landlords, over the years, some homeowners consider "turning the tables" and becoming landlords and real estate investors, themselves. While this is certainly not a guaranteed path to financial independence, some people do become quite successful at it. If you have a tolerance for risk and the tenacity to pursue it, then your real estate agent may be able to help you find some worthwhile income properties. It's not for everybody, though!
Finding a real estate agent who's results oriented, experienced, and a pleasure to work with is not an everyday event, but when it does happen, they're worth keeping as a trusted advisor for many years to come!
If you’re planning on buying a home in the near future and are confused about many of the terms associated with mortgages, you’re not alone. Real estate is its own industry with its own set of processes, terms, and acronyms. If you’re new to the home buying process, there can be somewhat of a learning curve to understand what each of these terms means.
Since buying a home is such a huge investment and life decision, there’s a lot of pressure on home buyers to make sure they get everything right. This makes for a stressful situation for buyers who don’t feel like they understand the terminology of things like mortgages, appraisals, credit reports, and other factors that contribute to the home buying process.
To alleviate some of those concerns and to make the home buying process run more smoothly, we’ve compiled a list of the most common, and most commonly confused, real estate words, terms, and acronyms. That way, when you’re talking things over with your real estate agent or your mortgage lender, you’ll be confident that you understand exactly what’s being considered.
Read on for our real estate terminology glossary.
Adjustable rate mortgage (ARM) - This is one type of home loan. Mortgage rates with this type of loan fluctuate throughout the repayment term of the loan. The fluctuation is based on a market indicator.
Fixed rate mortgage (FRM) - Another type of home loan, a fixed rate mortgage has a rate which does not fluctuate, remaining constant for the life of the term, most commonly 15 or 30 years.
Appraisal - An appraisal is the determination of the value of a property. Appraisals are used when purchasing and selling a home, as well as when refinancing a home loan. Appraisers are required to be licensed or certified in each state and are usually paid for by the lender.
Appreciation - An increase in a property’s value, most commonly due to market inflation, or the general increase in home prices over time.
Depreciation - A decrease in a property’s value, due to either market deflation (uncommon) or the wear and tear on a home that comes with age.
Closing costs - The costs and fees that a buyer is responsible for when purchasing a home or taking out a mortgage. These include underwriting fees, inspections, appraisals, transfer taxes, and more. Closing costs typically range from 2% to 5% of the total loan amount.
Contingency - Home purchases have contracts to protect the interest of the buyer, seller, and lender. Contingencies are provisions designed to protect the buyer or lender should something occur in the time leading up to closing on (or purchasing) the home. One common contingency is the buyer’s right to have a final inspection of the home before closing to ensure no new issues with the home have occurred.
Private mortgage insurance (PMI) - Buyers who cannot afford a down payment of %20 typically are required to take out a private mortgage insurance policy. This policy protects the lender should the borrower default (fail to repay or meet the conditions of their loan).