There are many mortgage options, including balloon loans, adjustable rate mortgages, and 30 year fixed rate mortgages, is a 15 year loan the one to choose? The 15 year loan is a hot topic these days and there are pros and cons to choosing this route.  Some feel that a 15 year loan is the way to go, with far less interest paid out over the length of the loan.  Others believe it is wrong to go with a 15 year loan when you may not be in the house for more than a few years.

There is no right or wrong answer when it comes to choosing a mortgage, what it all boils down to is: what is the right mortgage for you? If your goal is to own your home outright and pay the least amount of interest, therefore the least amount of money over time, then a 15 year mortgage could be the best option.

If you plan on keeping as much of your capital as possible and only plan on staying in your home for a few years then a 30 year mortgage might make more sense.  Choosing a 30 year loan will keep more money in the bank to invest elsewhere or cover any improvements or home repairs that may pop up.

Choosing the right loan for your individual financial situation is best done with the advice of a financial adviser. It’s also important to speak to a lender who knows your market. First Savings, Wells Fargo, Suntrust have great lenders. You need a lender you can trust and who is reliable, responsive and creative. Washington DC Real estate is a big investment, best entered into armed with as much education and information as possible.

Click here to read a recent article from CBS Money Watch, “Time to Ditch Your 30-Year Mortgage?”

There are many common home issues, knowing how to recognize them and what to do with them are important aspects of home ownership if you own a home in the DC area, U Street or anywhere. In a strange way your home talks to you, your senses capable of picking up its unique language if they are awake. From the obvious unique smell of a gas leak to the sound of a running toilet that won’t turn off, your home and its parts let you know what’s wrong, the important thing is not to wait too long before taking care of the problem at hand.

The main veins of a house are electrical and plumbing. Flickering lights and popping fuses are a definite cry for help, as are knocking pipes and leaky faucets. A simple call to a plumber or an electrician can save further headaches and heartaches and diagnose your home’s problems before the situation gets worse.

Encasing the internal organ of your home is its shell, the walls roof and windows. Cracks in the ceiling or paint bubbling from the walls could spell water or dampness issues. If the problem isn’t obvious call a professional to diagnose, maintaining your home’s structure and foundation is instrumental to its long term health.

It is extremely important to upkeep a home in order to preserve the investment. While repairs can appear costly at times, avoiding repairs can be much more costly in the long run. If you need contractors, email me since I have a list of contractors who can fix any defect you have or update your home to offset future problems. With all of the heavy rains we had in Washington DC, it may be good to check your roof or your basement.

Squaring away better credit is at the top of anyone’s mind who is intending to apply for a home loan or refinance and existing loan.  Good, make that great, credit is absolutely necessary to acquire a loan, and there is even talk about a change that will require a credit score of 690 or higher in order to do so.  What a potential borrower must ask themselves before starting the loan process is, “what is my credit score?” followed by “can I improve it?”

Some of the items that affect credit include:

• Paying bills on time
• Debt to income ratio
• Amount of outstanding debts

Reducing outstanding debts and continuing to pay bills on time is absolutely crucial before applying for a loan.  The guidelines for lending are certainly stricter these days, but in addition a borrower’s finances have to be organized and display the capability to make payments.  Financial questions are buzzing in the air at the moment, being that tax day just passed and income and expenses have been pored over with a fine tooth comb.  Knowing how to improve one’s financial status is imperative prior to applying for a loan these days.

Click here for some ideas from House Logic on how to improve your credit score.

There is much talk in the real estate market about rents going up.  The decrease in home ownership caused by the bursting of the nation’s housing bubble, combined with an increase in renters has put a big demand on rental markets across the country.  This demand is creating a competitive market that is allowing a climate for rents to increase. Rents in Washington are already high but we have seen a flood of people this past year move here for jobs. Our job market is strong and people are in need of work.

This is a prime example of how owning a home can be more beneficial than renting in certain markets.  Housing is more affordable than it has been in years in the majority of the United States.  Mortgage rates are low, inventories are high.  In areas where a monthly mortgage payment is the same or less than monthly rent, home ownership is a wise investment. Many buyers have capitalized on low interest rates and are now able to compfortably rent their places out and sometimes do better then just breaking even.

The National Association of Realtors has been hosting “Home Ownership Matters”, visiting cities across the nation and educating people on the values of home ownership.  A staggering statistic that they show is that the majority of home owners have a net worth of more than 30 times that of renters.

The mere fact that rents can go up in the U Street and Washington market as much as 10%, whereas fixed rate mortgage rates stay the same, make buying a home in today’s market smarter than renting, for those that can afford to buy a home.  Rent is, in essence, paying someone else’s mortgage.

Click here to read an article from CNN Money regarding the expected increase in rent.

Examining the nation’s real estate uncovers that people buying real estate are doing so because of the incredibly high affordability levels.  While mortgage rates have been dipping and rising in recent weeks, housing prices have continued to drop nationwide but not so much inside Washington’s beltway.  The high inventories in most markets are keeping prices from rising and sellers are forced to swallow the fact that if they want to sell they have to do so for less than originally thought. It’s a seller’s market when there are multiple offers. It’s a buyer’s market when the seller’s are scared of tomorrow. In U Street it’s a seller’s market. Depending on how you price your home and the location.

Low home values, low mortgage rates and high inventories have created an ideal time to buy real estate nationwide but not so much in Washington DC or in parts of Maryland and Virginia.  These are the best affordability levels with respect to real estate that have been seen in years and those buying are the people who do not want to look back in a few years and think if only I had bought then.

The best investments are those that are timed right.  Buying low and selling high is the motto, and those that can get it right are those that stand to make the most profit over time.  In a nutshell, there couldn’t be a better time to be a real estate investor.

Click here to read a recent article from the Wall Street Journal that points out how affordability is what drove real estate sales in 2010.

There are many remodeling Dos and Don’ts to examine before undertaking a project with regards to your real estate investment.  Underscoring any remodel is a homeowner’s financial position and commitment to the home.  If a remodel is being conducted to create a livable space to be enjoyed for some time and money is no object then remodel choices are not necessarily subject to an analyzing of the return on investment.  If money and value are important and the home will be sold after a remodel takes place then paying attention to current trends and cost vs. value reports is important. Too many peeople make mistakes by thinking there is always a recoup % when you are remodeling a home. I’ve seen way too many homes (espcially in the U Street area) where the seller think they’ve done a good job and that the market should pay for what they’ve done and need. In Washington DC there are too many remodeled homes which are not appealing to buyers.

Don’t go over the top.  No matter what the remodel, whether it is a kitchen, bathroom, or addition, going over the top with finishes, appliances or accessories will automatically reduce the return on your investment.  It is important to keep in tune with your neighborhood.  If you are in a gated luxury community then your finishes do need to be high end.  You don’t want to have the most luxurious house in a neighborhood because you simply won’t get the return on your investment. Don’t put tiled marble all over your house!

Do go green.  Improving your home’s efficiency and impact on the environment can reduce monthly bills and make a home more appealing to potential buyers.  It is important to remember that green is in.

Remodeling a home is carried out for one of two reasons: to add value or to make a home more livable.  Knowing your reason for a remodel will factor into your choices.  In the end, however, most people want to add value not reduce value in a home.  Knowing what is going on in Washington DC real estate will help you get the result you are looking for. If you need suggestions or advice, call me.

Click here to read the most recent remodeling cost vs. value report, and click here to read an article from Financially Fit titled “4 Renovations That Will Devalue Your Home”.

It is possible to conduct a series of tests to uncover how energy efficient your home is in the winter and summer.  In fact, if you are considering selling your home it could be a good idea to do so.  There are professionals in the Washington DC area who conduct home energy audits, determining how much energy your home utilizes while at the same time indicating changes that can be made to make it more efficient. Buyers are savy and a lot of buyers and interested in homes which protect the environment and their wallets.

An energy audit can uncover air leaks, insulation concerns, HVAC issues, lighting considerations and more.  Locating and fixing air leaks caused by weak window and door seals can save up to 30% on energy bills, a significant savings.  Sometimes fixing air leaks is as simple as caulking or adding weather stripping.  Want to check yourself?  Examine any area of your house where walls join windows or doors, or roofing materials meet skylights or chimneys.

Checking HVAC equipment can be done by a professional HVAC or plumbing technician.  A general rule of thumb is that if a heating system or air conditioning system is more than 15 years old it is probably inefficient compared with more recent models.  An annual exam of these systems before the season that they will be used is always a good idea as well.  Keeping systems maintained adds to their efficiency.

Insulation often goes hand-in-hand with seals.  While ceiling and wall insulation may be fine, checking in areas where walls meet roofs and chimneys meet roofing materials is a good idea.  Tight seals and insulation keeps warmth in during colder months and cool air in during warmer months.

Another helpful tip, 60 watt light bulbs use less energy than 100 watt bulbs.  There are also a host of energy efficient light bulbs available that decrease the energy used by your lighting fixtures.

Uncovering how energy efficient your home is, or isn’t, can help you market your home accordingly or make changes to your home that will make it more marketable.  Click here for some more great ideas on how you and your home can save energy.  U Street has transformed a lot in the last several years. Homes have been remodeled. If your search criteria includes U Street, then you will be surprised with the number of homes which are available on the market which are energy efficient and redone with cutting edge material.

When it comes to real estate in Washington DC, outdoor spaces are “in”.  The past few years have seen big changes in outdoor furniture alone.  All-weather wicker and resin has helped create outdoor couches, settees and sectionals, turning a deck or patio into an outdoor living room.  In addition the outdoor kitchen has been catching on, taking the outdoor grill and running with it.

It is not uncommon to find a built-in cooking area in an outdoor are of a home that includes a grill, oven, cook top, refrigerator and counter space.  People have expended their homes to include the outdoors making it not just a place to sit and read a book but also a place to entertain and entertain comfortably.

Making improvements to the exterior of your property can appreciate the value of your home and can make is very attractive to a renter if you are looking at your home as more as an investment.  In an age where many people have adjusted their priorities to include entertaining at home, the added space that the outdoors provides is being utilized in a new way.  An outdoor living room can catch a buyer’s eye, adding useful space and entertainment value at the same time. Having outside space within your search criteria is attainable. There are a variety of homes out there so it’s good to be picky in the Washington DC real estate market.

Click here for some great outdoor living space ideas from HGTV.

When remodeling your home or condo, examining your budget is a key element, going hand-in-hand with the physical aspects of the job.  Remodeling and basic improvements can add value to your real estate and approaching the work with fiscal responsibility will help maximize your profit. When making changes to your home it is easy to get carried away, adding features and altering products as you go along.  Depending on the scope of your project, hiring a contractor that will design the project and a budget could be the wisest step to make keeping someone financially in charge of the work at hand. You should interview several contractos to figure out who might be best suited for the job. 

A kitchen remodel can run from $10,000 to over $50,000.  The difference in budget can be related to fixtures, the scope of work, finishes chosen, appliances, and more.  There is high-end and low-end and everywhere in between.  To do a high-end remodel at a low-end price takes a lot of homework and shopping around to find appliances and finishes at discount prices.

After determining your plans and finances what can affect your remodeling budget?

• Where you buy your supplies
• Who you hire to do the work
• Changes to work orders

Cutting corners to save money should be examined at the onset of a project.  Maybe you will decide that you want a Sub Zero refrigerator more than granite counter tops.  Where you add in one area, you can subtract in another.  Just remember that your end result will affect the overall value and appeal of your home.

If you need help in determining what buyers like and dislike or to get a feel where there is a high percentage in recouping your improvements, please give me a ring. It’s good to get a perspective from and agent who has a pulse on what buyers are looking for. I work in Virginia, Maryland and Washington DC in all locations in and outside of U Street.

The question, “Is real estate a good investment in Washington DC?” is one which many have wondered over the course of our recession.  In most situations the answer is yes, especially for the long term.  Those buying real estate with the intent to live in a home or own a property for a long period of time are making an investment.  Historically speaking real estate has displayed a return that outpaces inflation by at least one percent if not higher.  In fact, regardless of the recent bursting of the housing bubble, many parts of the country have shown more than a 50% increase in property values since 1990.  While huge jumps in home values are not expected to occur any time in the near future, the subtle rise in values in most home prices will make long-term real estate values grow at consistent levels.

Now could be a great time to buy a home for the following reasons:

• Mortgage rates are hovering above historic lows and have nowhere to go but up.
• Home values appear to be stabilizing and even increasing in some markets. U Street is one of the markets.
• With the rates low, getting a renter to pay close or more to what you pay for monthly is quiet possibly feasable.
• Home affordability levels are at all time highs.
• Sellers are motivated.

There is no doubt that many people got caught up in the housing bubble, gambling on the huge returns that were occurring for real estate investors.  Unfortunately those that bought at the height of the market, as well as those who bought beyond their means, gambled and lost.  In today’s market buying a primary residence or rental property seems to make a lot more sense than it did at the height of the market, after all buying low and selling high is much better for your wallet than buying high and selling low.