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Ensuring Home Contractors Are Following The Rules Under HICPA

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, Blog, Nosari Home Mortgage, Inc., Nosari Home Mortgage, Inc.There are many homeowners who hire contractors to make repairs or upgrades on their homes. It is critical for home improvement contractors to follow all rules and regulations set forth by the law. These regulations have been set forth under the Home Improvement Consumer Protection Act, or HICPA. 

An Overview Of The Home Improvement Consumer Protection Act

The Home Improvement Consumer Protection Act was put forth to ensure that homeowners and contractors come to an appropriate agreement. Some of the rule and regulations that are included in the Home Improvement Consumer Protection Act include:

  • All contractors need to obtain a registration number
  • Home contractors are required to register with the Office of the Attorney General
  • All home contractors need to pay the required registration fees

Finally, the Home Improvement Consumer Protection Act also specifies the various terms that need to be included in each agreement set forth by homeowners and contractors. Any contractors agreed to by contractors and homeowners need to comply with the Home Improvement Consumer Protection Act. The purpose of this act is to protect homeowners against fraudulent contractors. 

What Happens If An Agreement Does Not Follow The Rules?

If an agreement does not abide by the regulations included in the Home Improvement Consumer Protection Act, then there might be liability in a civil court. Furthermore, there could even be criminal charges that result. 

In the event that a homeowner enters into civil litigation against a home contractor, the first item that lawyers will look into include the regulations under the Home Improvement Consumer Protection Act. If the contractor violated any of the regulations, the HICPA may also specify penalties that might be levied against the contractor.

When Does The Home Improvement Consumer Protection Act Apply?

There are only a few exceptions where the HICPA would not apply to a home improvement job. Even though the definitions under the HICPA are very broad, this act does not apply to contractors who earn less than $5,000 of taxable income in a given year. Finally, the HICPA applies only to home improvements. It does not apply to the construction of a new home. The act also does not apply to the sale of any home appliances.

If you are in the market for a new home or interested in refinancing your current property, be sure to consult with your trusted home mortgage professional. 

3 Tips to Find the Best Neighborhood to Live In

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, Blog, Nosari Home Mortgage, Inc., Nosari Home Mortgage, Inc.The vast majority of people are going to move at least once in their life. Moves can vary in distance. Sometimes, these moves are across town. Other times, they might be across the country. Regardless of the distance, is important to find a neighborhood that fits both the budget and lifestyle. There are a few tips to keep in mind.

1. Consider Renting First

Even though there are powerful electronic tools that can help a family narrow down their potential landing spots in a new city, it is impossible to be 100 percent certain that the community is a comfortable fit until actually living there for some time. Therefore, it might be a prudent idea to try renting first.

Renting in that location doesn’t come with the same commitment as buying property. Therefore, if the neighborhood isn’t the right fit, individuals and families can move without having to sell their house. On the other hand, if the community is still a great fit after a few months or a year, it is easier to buy a house at that point in time.

2. Look At The Cost Of Living

Everyone has a budget and most people like to focus on the price of the home. After all, this is likely going to be the biggest expense; however, there are some other factors that are going to play a role as well.

Think about the cost of gas, transportation, the rates on various utilities, healthcare costs, real estate taxes, food prices, and more. All of these factors are going to play a role in how expensive it will be to live in a certain location. Gas prices are going to vary widely depending on state taxes. Some municipalities have local income taxes while others don’t. There might even be HOA fees to consider. Think about all of these factors and their impact on the cost of living.

3. Prioritize Safety

Lastly, even though the financial factors deserve consideration, safety needs to come first. Take a look at the crime rates in the local area. Read some of the local police reports. When visiting, look for signs of vandalism and home damage. This will help everyone estimate the safety of a potential landing spot pretty quickly. Safety should always come first.

If you are in the market for a new home or interested in refinancing your current property, be sure to contact your trusted home mortgage professional.

What’s Ahead For Mortgage Rates This Week -February 24th, 2020

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, Blog, Nosari Home Mortgage, Inc., Nosari Home Mortgage, Inc.Last week’s scheduled economic reporting included readings on builder confidence in housing markets, housing starts and building permits issued and sales of previously owned homes. Weekly readings on mortgage rates and first-time jobless claims were also released.

NAHB: Builder Confidence Remains Strong Despite Challenges

February data from the National Association of Home Builders indicated strong builder confidence in housing market conditions overall, but February’s index reading was one point lower at 74. Readings over 50 indicate that most builders have a positive outlook on housing market conditions.

Homebuilder outlook remained positive, although building materials and buildable lots remained costly. Demand for affordable single-family homes was high due to short supplies of existing homes for sale. Homebuyers turned to new homes to find more options. Low mortgage rates and strong job markets contributed to high builder confidence readings.

Housing Starts Fall in January as Building Permits Rise to 13-Year High

Commerce Department data on housing starts showed that the pace of housing starts slipped  3.60 percent from 1.626 million starts in December to 1.567 million starts in January. Housing starts are calculated on a seasonally-adjusted annual basis; analysts said that January’s housing starts were markedly lower after an unexpected rise in housing starts in December 2019.

Building permits rose by 9.60 percent in January with 1.55 million permits issued as compared to 1.420 permits issued in December and an expected annual pace of 1.453 million housing starts for January.

Ongoing shortages of available single-family homes can only be resolved by building more homes, but home builders face obstacles in obtaining necessary zoning  approvals. January’s increase in permits issued is expected to help ease persistently slim inventories of homes for sale.

Sales of previously-owned homes dipped in January due to short supplies of homes for sale and fewer options for would-be home buyers. Pre-owned homes sold at a seasonally-adjusted annual pace of 5.46 million sales as compared to December’s reading of 5.53 million sales.

Mortgage Rates Mixed, New Jobless Claims Rise

Freddie Mac reported little change in average mortgage rates last week. Rates for 30-year fixed-rate mortgages rose two basis points to 3.49 percent; the average rate for 15-year fixed-rate mortgages also rose two basis points to 2.99 percent.

The average rate for 5/1 adjustable rate mortgages fell by three basis points to 3.25 percent. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages and 0.80 percent for 15-year fixed-rate mortgages. Discount points averaged 0.20 percent for 5/1 adjustable rate mortgages.

New jobless claims rose to 210,000 claims filed, which matched expectations. The prior week’s reading showed 206,000 first-time claims filed.

What’s Ahead

This week’s scheduled economic reports include readings on home price trends from Case-Shiller and the Federal Housing Finance Agency and readings on new home sales and consumer sentiment. Weekly readings on mortgage rates and new unemployment claims will also be released.

FHA Down Payment Requirements: Homeownership Without A Big Savings Account

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, Blog, Nosari Home Mortgage, Inc., Nosari Home Mortgage, Inc.Buying a home for the first time can be a challenge. One of the tools created to help people buy a home for the first time comes in the form of FHA loans. There were loans that were supported by the Federal Housing Administration (FHA). They can require a down payment that is as low as 3.5 percent. 

FHA loans are significantly different from traditional mortgage loans. Those who have purchased a house before have likely heard that the average down payment is closer to 20 percent of the value. This can make it hard for someone to buy a home, particularly if they already have a car loan and credit card debt.

The Role Of The Credit Score For FHA Loans

Anyone who is interested in a mortgage with a down payment of 3.5 percent will want to do everything they can to make sure they have a strong mortgage application. This starts by taking a look at the credit score. 

A credit score of 580 or higher will increase someone’s chances of successfully applying for a mortgage with a 3.5 percent down payment. Those who have a credit score between 500 and 579 will likely be asked to put 10 percent down in order to qualify for a loan through the FHA program.

For example, someone who is looking to buy a home that costs $250,000 may only need to put down $8,750. On the other hand, if someone’s credit score is under 580, they might be asked to put down $25,000. This can make a tremendous difference to someone who is trying to purchase a home.

The Other Requirements Of An FHA Loan

While a small down payment is attractive to many people, one catch is that homeowners may be asked to purchase private mortgage insurance, or PMI, under this program. This insurance policy is required because the lenders through the FHA program are taking on more risk by accepting a smaller down payment.

PMI is a cost that will need to be paid monthly, in addition to the mortgage payment. Those who are willing to put down a larger down payment might be able to get the PMI requirement waived.

If you are in the market for a new home or interested in refinancing your current property, be sure to consult with your trusted home mortgage professional.

NAHB: Home Builder Confidence Near 1999 High

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, Blog, Nosari Home Mortgage, Inc., Nosari Home Mortgage, Inc.The National Association of Home Builders reported a housing market index reading of 74 in February; the index reading was one point lower than for January and was only two points below the highest reading of 76 reported in December. Readings over 50 indicate that most builders consider housing market conditions to be positive.

Factors contributing to builder confidence included strong housing markets and low mortgage rates; job growth and higher wages also boosted builder confidence.

Low Inventory Influences Home Prices

Low inventories of available homes continued to drive demand and rising home prices. Homebuyers faced with low supplies of existing homes turned to new home developments for additional options. First-time homebuyers faced obstacles including affordability and student loan debt that negatively impacted the ability to save for a down payment and qualify for home loans.

High costs of building materials and lots contributed to homebuilder expenses and higher home prices. Analysts noted that environmental and zoning issues also presented challenges for builders and limited their ability to meet the rising demand for affordable single-family homes.

Composite indices used to calculate the Homebuilders Housing Market Index slipped one point in each category. Builder confidence in current market conditions for newly-built single-family homes fell to an index reading of 80 and builder confidence in market conditions over the next six months dipped to 79. Buyer traffic volume in new housing developments dropped to 57, but buyer traffic readings of 50 or more were historically rare until recently.

Analysts identified correlations between the Housing Market Index and readings on consumer sentiment. The University of Michigan’s Consumer Sentiment Index and the Conference Board’s Consumer Confidence Index readings trend close to the NAHB Housing Market Index but are reported one month behind the Housing Market Index.

Regional Builder Confidence Mixed

Homebuilders reported mixed confidence in housing market conditions throughout the U.S. Market Conditions improved in the Northeast where homebuilder confidence was five points higher at 67. The Midwestern region reported a builder confidence reading of 62, which was five points lower than January’s reading. Homebuilder confidence in the South rose two points to an index reading of 79; homebuilder confidence fell four points in the West to 82.

Regional builder confidence levels reflect local economic conditions and events impacting housing markets.

 

Big Home Repairs That Can Sink A Budget Quickly

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, Blog, Nosari Home Mortgage, Inc., Nosari Home Mortgage, Inc.For most individuals and families, their home is the most expensive investment they will ever purchase. Therefore, it is important for everyone to take care of their home. Routine maintenance can prevent costly repairs from arising down the road.

It is important for homeowners to make sure they budget for home maintenance and repair costs. Even with a meticulous repair schedule, it is still possible that a major repair might be required. There are a few home repairs that are more expensive than others.

Damage To The Foundation Of The Home

One of the most expensive home repairs that might come up involves damage to the foundation. The foundation is the part of the home that supports the rest of the structure. Therefore, its strength is vital to the integrity of any building.

Depending on the exact nature of the project, repairing the foundation of a home may cost close to $100,00 if the building is large and the damage is severe. At a minimum, homeowners should expect to spend a few thousand dollars on a home foundation repair project.

Some of the most common reasons why a foundation might be damaged involve plumbing issues, clogged gutters, and flooding. Water can corrode the foundation and pool around the base, leading to damage. Therefore, the water system also needs to be addressed with any foundation repair.

A Roof Repair Can Be Costly

The roof is one of the most important barriers in the home. It separates the interior of the home from the dangers of the elements outside. Therefore, it is critical for the roof to remain intact. Roofs need to be inspected regularly.

If there is a problem with the roof, this may cost more than $10,000. Regularly inspecting the roof and making repairs and replacements as they come up can save a home’s budget.

Siding Repairs Are Expensive

Finally, water and wind can damage the siding of a home. Furthermore, insects and other pests can also lead to siding repairs. Repairing a single piece of siding isn’t costly; however, if the entire siding needs to be replaced, this may cost more than $15,000. The exact nature of the cost is going to depend on the materials chosen.

If you are in the market for a new home or interested in refinancing your current property, be sure to contact your trusted home mortgage professional.

What’s Ahead For Mortgage Rates This Week -February 18th, 2020

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, Blog, Nosari Home Mortgage, Inc., Nosari Home Mortgage, Inc.Last week’s economic reporting included releases on inflation, retail sales, and consumer sentiment. Weekly readings on mortgage rates and first-time jobless claims were also released.

Inflation Hits Highest Growth Pace Since 2018

Consumer staples including rent, prepared food and medical expenses caused inflation to rise 0.10 percent from December to January, which was the smallest month-to-month growth in four months. Rents drove month-to-month inflation with a growth rate of  0.40 percent.

Year-over-year inflation grew from 2.30 percent to 2.50 percent, which was the highest year-over-year growth rate since Fall 2018. Analysts said that inflation remained low according to historical data and that no sharp inflationary growth was expected.

The rapid acceleration of rents and home prices continued to create obstacles for renters and homebuyers, who faced prices rising faster than the overall inflation rate and wage growth,

Retail Sales Dip in January

The Commerce Department reported an 0.30 percent drop in retail sales for January, which matched expectations, but was half the growth rate of 0.60 percent posted in December. January’s lower reading was largely attributed to clothing stores, which experienced a 3.10 percent decline in sales after the holiday season.

Analysts expected retail sales to grow at a pace fast enough to support economic growth throughout 2020.

Mortgage Rates and New Jobless Claims Rise

Freddie Mac reported higher rates for fixed-rate mortgage loans last week; rates averaged 3.47 percent for 30-year fixed-rate mortgages and were two basis points higher. Rates for 15-year fixed-rate mortgages averaged one basis point higher at 2.97percent.

Rates for 5/1 adjustable-rate mortgages rose an average of four basis points to 3.28 percent. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages, 0.80 percent for 15-year fixed-rate mortgages and 0.30 percent for 5/1 adjustable-rate mortgages.

First-time jobless claims rose to 205,000 new claims filed but fell short of an expected reading of 211,000 new claims filed. The prior week’s reading for new unemployment claims was 203,000 claims filed.

The University of Michigan reported higher consumer confidence for February; the Consumer Sentiment Index rose to 100.8 from January’s index reading of  99.8. Analysts predicted no change for February’s reading.

What’s Ahead

This week’s scheduled economic news includes readings on NAHB Housing Markets, Housing starts, building permits and sales of previously-owned homes. Weekly readings on mortgage rates and new jobless claims will also be released.

Home Improvements That May Improve Resale Value

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, Blog, Nosari Home Mortgage, Inc., Nosari Home Mortgage, Inc.Did you know that some home improvements lower the resale value of a home and decrease the number of potential buyers? If you are going to repaint the exterior of your home bright, traffic-cone orange and try to sell it for a high price, think again! Maybe, if the artist Pablo Picasso once lived there that might work, but probably not under any other circumstances.

Some things are counter-intuitive. A swimming pool is an example. Swimming pools are great and highly desirable for many people. However, others do not necessarily think so and only see them as adding unnecessary expenses for maintenance and upkeep.

There are general guidelines to follow, which give you a better chance to increase the resale value of a home by making certain improvements. If possible, work with your REALTOR® who understands the local real estate market conditions before making decisions about investing in renovations to increase a home’s resale value.

Be aware that the industry averages show a percentage of recoupment of the investment and no renovations make back what they cost, in terms of increased resale value. This means you should only consider renovations that you like for other reasons as well as the potential financial impact on the home’s value. The only way to profit from renovations is to do some work yourself.

Renovations — Partial Recoupment In Resale Value

Here are the top ten things to consider with their average installation cost, average increased resale amount, and the average recoupment percentage as ranked by Remodeling in the 2020 Cost vs. Value Report:

1. Manufactured Stone Veneer (applied to the front of the home)

Installation Cost $9,357 — Increased Resale Amount $8,943 — Recoupment 96%

2. Garage Door Replacement

Installation Cost $3,695 — Increased Resale Amount $3,491 — Recoupment 94%

3. Fiber Cement Siding (applied to the exterior of the home)

Installation Cost $17,008 — Increased Resale Amount $13,195 — Recoupment 78%

4. Vinyl Siding (applied to the exterior of the home)

Installation Cost $14,359 — Increased Resale Amount $10,731 — Recoupment 75%

5. Vinyl Windows (double-pane)

Installation Cost $17,461 — Increased Resale Amount $12,761 — Recoupment 72%

6. Wooden Deck

Installation Cost $14,360 — Increased Resale Amount $10,355 — Recoupment 72%

7. Wood Windows (double-pane)

Installation Cost $21,495 — Increased Resale Amount $14,804 — Recoupment 69%

8. Steel Entry Door

Installation Cost $1,881 — Increased Resale Amount $1,294 — Recoupment 69%

9. Composite Deck

Installation Cost $19,856 — Increased Resale Amount $13,257 — Recoupment 67%

10. Asphalt-Shingled Roof

Installation Cost $24,700 — Increased Resale Amount $16,287 — Recoupment 66%

The runner-ups, with their recoupment percentages, are remodeling the bathroom (62%), metal roofing (61%), a kitchen remodel (59%), a bedroom addition (59%), and a bathroom addition (55%).

Summary

Notice that the top ten items that make the most positive impact on the resale price are all exterior projects and most of them are visible from the front of the home. The wise adage of “curb appeal sells” seems to be true when it comes to renovations that generally improve resale value.

If you are in the market for a new home or interested in refinancing your current property, be sure to consult with your trusted home mortgage professional.

Common Problems Faced By New Homeowners

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, Blog, Nosari Home Mortgage, Inc., Nosari Home Mortgage, Inc.Buying a new home is a big step for individuals and families. This is a time for celebration as the new furniture gets moved in, everyone gets adjusted, and the honeymoon phase starts with the new home. On the other hand, buying a home also means that all of the responsibilities rest with the owners.

Here are a few common problems that new homeowners face.

Taking Care Of The Outside

Many homeowners are quick to realize that there is a tremendous amount of maintenance on the outside of the home. Now, the exterior is their responsibility and doesn’t fall on a landlord. Sure, it can be helpful to hire someone; however, this can be expensive.

Some of the common questions that homeowners have include how frequently they should water the lawn. There might also be questions regarding which type of fertilizer and when they should use this. Also, the issues caused by weeds can be substantial. When in doubt about these issues, simply reach out to a professional and ask for help. Someone is always willing to lend a helping hand.

Plumbing Issues Are Common

It is important to do a home inspection before buying a home. This will let the potential buyer know about any repairs they might be inheriting. Some of the common issues have to do with the plumbing system.

One of the most common issues has to do with clogs. Sometimes, the clog takes place in the sink when someone tries to force food down the drain. In other situations, toilets might get clogged if something other than toilet paper gets flushed down the toilet. While a basic plunger is a great place to start, it is also prudent to invest in some drain cleaner and a snake.

The Lights Go Out

Sometimes, people are shocked to see the power go out during a storm. In some cases, the power company may need to come out and handle the repairs. In other situations, it might be a tripped circuit breaker. When the power goes out, head to the circuit breaker and take a look at any fuses that might be turned off. Unplug some of the appliances and then turn the circuit breaker back on! This might do the trick, but if it goes out again, call an electrician.

If you are in the market for a new home or interested in refinancing your current property, be sure to consult with your trusted home mortgage professional.

The Impact Of The New Housing Construction Boom

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, Blog, Nosari Home Mortgage, Inc., Nosari Home Mortgage, Inc.New housing construction starts reached a record high in December 2019 going up 16.9%. This represents a seasonally-adjusted annual rate of 1.608 million homes last December, which beat the record set in December 2006, 13 years ago, according to CNBC.

This was surprising news, as predictions made before the end of the year were that housing starts in December would reach only 1.375 million homes.

Experts say the current housing construction boom in the United States gets its support from the easy mortgage financing available and positive consumer expectations about the economy.

What Does The New Housing Boom Mean To Buyers And Sellers?

It is a wonderful time to be a home builder, except that builders are experiencing a shortage of construction labor and less availability of low-priced building lots. Nevertheless, there are plenty of interested buyers, especially for modestly-priced starter homes that very desirable for first-time homebuyers.

If you are one of these interested buyers, then, make sure you stand out from the crowd. Be sure to get your credit history in order so that any mistakes are corrected. Get pre-approved for a loan commitment in writing to be the most attractive buyer to a home builder. You may also have to be patient while waiting for your new home to be built. Put your deposit down and then allow extra time for the process to complete. Builders are extremely busy right now.

Consider Renovating For Resale Value

If you are thinking of selling your home, consider making renovations to bring it up to high-quality standards in a “like new” condition. Many buyers who are paying a premium for a newly constructed home will also consider a newly renovated one. Work closely with your REALTOR® to make sure your renovations have the best chance to add value and increase the resale price.

The Boom Areas

Housing starts were up about 40.8% in December when considered on a year-on-year basis. Single-family homes are the largest portion of the housing market. Those new housing starts increased in the Midwest and the South while decreasing in the Northeast and the West. The Midwest and South are seeing revitalized interest in residential home investments after being stagnant for the previous six quarters.

Summary

As we go forward in 2020, homebuilders’ confidence is slowing slightly but still remains close to levels last experienced in the middle of 1999. The housing market, which represents about 3.1% of the total U.S. economy, is doing its part to support the longest economic expansion on record.

If you are in the market for a new home or interested in refinancing your current property, be sure to consult with your trusted home mortgage professional.

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