You’ve most likely heard the rule: Save for a 20-percent down payment before you buy a home. The logic behind saving 20 percent is solid, as it shows that you have the financial discipline and stability to save for a long-term goal. It also helps you get favorable rates from lenders.
But there can actually be financial benefits to putting down a small down payment—as low as three percent—rather than parting with so much cash up front, even if you have the money available.
The downsides of a small down payment are pretty well known. You’ll have to pay Private Mortgage Insurance for years, and the lower your down payment, the more you’ll pay. You’ll also be offered a lesser loan amount than borrowers who have a 20-percent down payment, which will eliminate some homes from your search.
The national average for home appreciation is about five percent. The appreciation is independent from your home payment, so whether you put down 20 percent or three percent, the increase in equity is the same. If you’re looking at your home as an investment, putting down a smaller amount can lead to a higher return on investment, while also leaving more of your savings free for home repairs, upgrades, or other investment opportunities.
THE HAPPY MEDIUM
Of course, your home payment options aren’t binary. Most borrowers can find some common ground between the security of a traditional 20 percent and an investment-focused, small down payment. Your trusted real estate professional can provide some answers as you explore your financing options.
We’re well into the fall season and winter is right around the corner. This is the time of year when it’s especially important to make sure your home is properly sealed. Air leaks can make it difficult to keep your home properly heated and can lead to high utility bills. Here’s quick guide to checking your home for air leaks.
Do an air pressure test. You can quickly check for air leaks with a simple test using household items. Seal your home by completely closing all doors, windows, and vents and turning off exhaust fans. Then pass a burning incense stick along the edges of all doors, windows, and other openings to the outside. If the smoke is forced into or away from an opening, you’ve found a leak.
Inspect doors and windows. To check for leaks near your windows, attempt to rattle the frame. This will reveal whether there are gaps along the edges. Also check for cracks in the frame, loose screws in locks, or gaps anywhere in the window.
Door hinges and thresholds are common places for air leaks. Deteriorated weather stripping can also lead to leaks and the door itself can develop cracks that allow air to pass through.
Skylights are a little trickier to test and examine, but you can still do it yourself. Check for water stains near your skylights, which is a dead giveaway of a leak. If you suspect there is one, you’ll have to get on the roof for a closer inspection. Look for loose shingles, cracked roofing cement, and debris.
Hardwood floors are highly desirable for most homeowners, but they come with their share of challenges when it comes to cleaning, maintenance, and repairs. After a few months or years of heavy use from kids playing with toys and chairs being shuffled around, it may be time for some DIY fixes.
Hiding scratches: If you’ve got a good eye for matching colors, you can actually use crayons or markers or purchase wax sticks from the hardware store to fill-in scratches. Try to match the stain color on your floors, but don’t worry if it’s a little off. If the color is close, once the scratch is filled, it’ll look like a variation in the wood grain.
Polishing floors: You can make a polish solution for your floors from household ingredients. Mix olive oil and vinegar in equal parts, pour it directly into scratches, and then wipe it off after 24 hours. It may take several applications, but this homemade polish will fill and cover most scratches.
Clever decor: It’s not a long-term solution, but sometimes the most painless way to fix scratches in your floors is to cover them with a rug or furniture arrangement.
Spot sanding: For deeper scratches, you’ll need to spot sand with fine steel wool or sandpaper, use wood filler, and stain and seal the repaired area.
When you put your home up for sale, one of the best ways to determine the asking price is to look at comparable sales. There’s rarely a perfect apples-to-apples comparison, so a pricing decision often relies on comparisons to several recent sales in the area. Here are five criteria to look for in a sales comparison.
Location: Homes in the same neighborhood typically follow the same market trends. Comparing your home to another in the same neighborhood is a good start, but comparing it to homes on the same street or block is even better.
Date of sale: It varies by location, but housing markets can see a ton of fluctuation in a short time period. It‘s best to use the most recent sales data available.
Home build: Look for homes with similar architectural styles, numbers of bathrooms and bedrooms, square footage, and other basics.
Features and upgrades: Remodeled bathrooms and kitchens can raise a home’s price, and so can less flashy upgrades like a new roof or HVAC system. Be sure to look for similar bells and whistles.
Sale types: Homes that are sold as short sales or foreclosures are often in distress or sold at a lower price than they’d receive from a more typical sale. These homes are not as useful for comparisons.
Organic food usually tastes better, and is better for you, but it can also be very expensive compared to non-organic products. Organic food can cost nearly 50 percent more, thanks to the extra labor required to produce it and consumers’ demand exceeding supply.
So how do you get tasty organic food without spending a ton of extra money? Follow these tips to get more bang for your buck.
Shop at farmers’ markets: You can get fresh organic produce for far less at a farmers’ market than you’d pay at the grocery store. It’ll taste just as good, and you’re getting your food straight from the source.
Choose seasonal produce: Out-of-season produce usually has to be imported, and that can really drive up the price. Focus your meals on in-season fruits and vegetables so that you don’t end up paying $6.00 for a pound of organic asparagus.
Shop more frequently, and plan your meals around bulk sales: The trick here is to only buy what’s needed for your meals, and to only plan for a week of meals at most. That way you’re less likely to throw food away, because you can use leftover produce for more meals before it goes bad.
Grow your own: A home vegetable garden will provide some extremely cheap organic produce, and gardening can also be a fun and rewarding hobby.