Financing options for remodeling projects

Posted on May 19, 2012 by Alice Kuder

The Board members of Savvy Seattle Women are all experienced professionals in fields related to home ownership, and we are available to answer your questions. This is the one in a series of posts addressing common questions we often hear from home owners and aspiring home owners.

Q: What are my options for financing my home remodeling project? 

A: If you’ve owned your existing home for several years and still have a good equity position it is possible to have a bank establish a line of credit.  It is typical for a bank or credit union to finance up 60% to 80% of the home’s total value.  As an example, let’s assume the current value of your home is $500,000. 00 and your current 1st mortgage is $200,000.00, the bank may open a line of credit so the total of both the 1st mortgage and new LOC (position #2) does not exceed 80%.   See Example:

Value $500K

X 80% Loan to Value: = $400K

Minus balance of 1st Mortgage: <$200K>

Maximum Line of Credit Allowed: $200K

If you don’t have equity in your home, it is not likely that the lender will open up a line of credit and you will need to look at other possibilities.

Construction Financing:

With Construction Financing, the lender will lend upon the future value of the home.  In most cases, they will want to be assured that at the end of the project, the home will have a sufficient equity position (20%).  With Construction Financing, you will need to make a formal loan application that will determine your loan qualification and need to provide this additional information to the lender to determine an estimated future value.  This information may include; scope of work, list of materials, builder specification & plans, permits & licenses, contractors resume.  This additional information will be sent to an independent property appraiser to determine future value.  Once future value is determined, it is common for the lender to limit the loan to 80% of future value.  The lender will require this new construction loan to be in first lien position, therefore any existing loans/liens will need to be paid off  with the proceeds of this loan and the remainder of the funds will be distributed as the work has been completed.  Extreme caution should be taken to ensure that there are enough funds to cover the costs of construction and contingencies.  This is a complex process and potential buyers will want to choose the right “players” to ensure they are protected as well as the lender.

The above response is provided by Deanne Sposari, Sr. Loan Consultant, Evergreen Home Loans. Need more information? Call Deanne at 206-678-5946.

deanne sposari

Deanne Sposari

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How to hire a plumber

Posted on May 17, 2012 by Alice Kuder

We Savvy Seattle Women are commonly asked about how and where to find skilled, honest, experienced home service professionals, so we put together a booklet of guidelines. Following is one chapter from the booklet. More to come.

Meanwhile, you can ask us questions through this website or via our Google discussion group. Send e-mails to SavvySeattleWomen@GoogleGroups.com and one of our experts will answer your question.

How to Hire a Plumber

►Determine what kind of work you need done. There are 2 different types of plumbers. The first handles common repairs such as leaking pipes & faucets. The second specializes in large remodeling projects & new construction.  Some also specialize in residential or commercial work.

►In addition to friends & family, your real estate agent, general contractor & employees at your local plumbing supply store are good sources for recommendations.

►As with any service pro, ask for proof of licensing & insurance. Ask for & call references. Check their status with the Better Business Bureau. (If there are complaints, give them a chance to tell their side of the story.)

►Once you identify 2 or 3 plumbers you want to interview, ask them to come to your home to survey the job & provide a written estimate that includes:

  • a materials list
  • the scope of the project
  • any excluded items
  • payment terms

Some may charge a fee for an in-person estimate.

 

Questions to ask:

¨ What type of materials will you use?

Ask for quality materials from manufacturers that offer warranties. Cheap materials may save you money today but cost you much more later if they fail, causing water damage to your home.

¨Are there good alternatives to copper pipes?

CPVC pipe may be another option.

¨How long have you been in business?

¨Will you obtain all required permits?

¨Do you guarantee your work?

¨In what condition will you leave the work area?

¨What steps will you take to prevent injuries & property damage?

 

►Compare prices, but the cheapest isn’t always the best. You want someone who will do the job right the first time, using quality materials.

Don’t forget about our monthly mingle event, Wine and Wisdom, where you can ask questions of “live” experts! Third Wednesday of every month.

Free pocket guides

 

 

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Refinancing your home loan

Posted on May 15, 2012 by Alice Kuder

The Board members of Savvy Seattle Women are all experienced professionals in fields related to home ownership, and we are available to answer your questions. This is the one in a series of posts addressing common questions we often hear from home owners and aspiring home owners.

Q: What are my options for refinancing my home loan?

A: Before you make an application to refinance your existing mortgage loan, you will want to review your current loan terms with a professional seasoned Loan Officer.   The first question that needs to be determined is the reason for your refinance.  It is common for people to refinance their existing loan if rates are lower AND (1) they want to reduce their monthly payment, or (2) they need to pull additional cash out of their property to pay off “other debt”, or (3) they need to refinance because their existing loan has a balloon payment that is due, or (4) they want to remove an owner of the property off the title and existing loan.

Under traditional financing, the two  factors that are constant in all of the situations above are: (1) does the refinance to “make sense” to the lender, and (2) does this refinance meet the goal of the borrower?  In most cases, the lender will want to be assured that there is equity in the home, and that can only be determined by having the property appraised.  It is typical for the cost of the appraisal to be paid by the borrower upfront.  In the event the property does not appraise to achieve the minimum underwriting standards, the loan could be declined.

In recent year we have seen some government intervention with loan programs that are actually helping buyers refinance with today’s lower rates even if you owe more than the house is worth.  If your existing loan was closed (and delivered to FNMA OR FREDDIE MAC) prior to 5/31/2009, the HARP #2 loan program might be a viable refinance for you.  The benefit of the HARP #2  refinance is  the possibility of refinancing your existing loan even if you are “underwater”, also referred to as “negative equity”.

If your existing home loan is an FHA Loan, you may be eligible for an FHA Streamline (Rate & Term) without an appraisal.   If looking into this loan program, you will want to compare the interest rate AND the new upfront and monthly mortgage insurance premium as they might be higher than what you are currently paying.

Remember, just because the rate is lower than your current loan, does not necessarily mean it is the best option.  You will want to consider the “costs” of the refinance. Is the monthly savings enough to justify the upfront costs of the loan?  How long are you going to keep this home?   A good Loan Officer will ask you the right questions that will help you to make that determination, as every personal situation is different.

The above response is provided by Deanne Sposari, Sr. Loan Consultant, Evergreen Home Loans. Need more information? Call Deanne at 206-678-5946.

deanne sposari

Deanne Sposari

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Are home loans tough to get?

Posted on May 13, 2012 by Alice Kuder

The Board members of Savvy Seattle Women are all experienced professionals in fields related to home ownership, and we are available to answer your questions. This is the first in a series of posts addressing common questions we often hear from home owners and aspiring home owners.

Deanne Sposari, Sr. Loan Consultant with Evergreen Home Loans, fields this first question.

Q: I hear that it’s tough to get a home loan these days. Is that true?

A: It is true that the criteria that lenders use to qualify borrowers for home financing has “tightened up”.  That being said, lenders are out there lending money for home loan transactions.

Just a few years ago, the lenders were funding home loans with little regard to the borrowers financial ability & stability.  This was one of the many reasons for the mortgage crises we’ve experienced over the last few years.

Today, lenders are held to more responsible underwriting (decision making) standards.  It is the lenders’ responsibility to make sure they only fund a loan that the borrower has the ability to repay.  Due to the industry negligence in prudent underwriting practices in the past, the pendulum has swung to the other extreme!

Most of the difficulty in financing has been the requirement of full documentation.  Remember to keep all your financial records as your lender will want to see it ALL.  Also be prepared to explain the most obvious financial situations that are uncovered during the underwriting process.  It is the decade of documenting, documenting and more documenting.

The Good News…..  To the future homeowners of America, if you have a FICO credit score of 620 or higher (good payment history over the last 12 months), 3.5% down payment, current employment over the last two years, there is a good chance you could be approved for a home loan you can actually afford.

Need more information? Deanne can be reached at 206-678-5946.

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New Tagline Wanted

Posted on May 10, 2012 by Alice Kuder

Savvy Seattle Women is all about encouraging and supporting women who want to own and maintain their own homes. Unfortunately, when we named the group, we chose a tagline — “a homeowners’ network” –that isn’t as inclusive of aspiring home owners as it is of current home owners. We’d like to change that and would appreciate your suggestions.

Here are some of the ideas we are considering, but if we really liked them, we wouldn’t be asking for your input, so please just use them as a springboard.

Savvy Seattle Women: Real Estate Resources

Savvy Seattle Women: A Nesters’ Network

Savvy Seattle Women: A Dream Builders’ Resource

Savvy Seattle Women: A Housing Resourse

Savvy Seattle Women: Residential Resources

Savvy Seattle Women: Encouraging Home Ownership

Savvy Seattle Women: Homing Resources

Savvy Seattle Women: Creating Homes

Savvy Seattle Women: Fashioning Homes

And your suggestions are… ?

 

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More Wine and Wisdom

Posted on May 8, 2012 by Alice Kuder

Wine and Wisdom, our monthly mingle event that brings together home owners and home service professionals, is gaining steam!

Why settle for online reviews when you can meet the professionals live and in person in a casual, fun environment? Wine and Wisdom provides a time & place for homeowners and aspiring home owners to mingle with home service professionals to get expert advice on home projects. Also a great opportunity to conduct stealth interviews with local pros, e.g. contractors, painters, lenders, real estate agents, etc. while sipping complimentary wine and gathering pearls of wisdom.

Mark your calendar for May 16th and plan to join us for a few minutes or the whole hour, 6-7PM at the Prudential Northwest Realty office in West Seattle’s Jefferson Square at 4700 42nd Ave SW, Suite 600.

Are you a business owner yourself? Bring your business cards and do a little networking of your own.

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Nationwide Open House Event April 28 & 29, 2012

Posted on April 27, 2012 by Alice Kuder

If you are thinking of buying a home, this will be a good weekend to see what your money can buy.

The National Association of Realtors (NAR) is hoping to fill the streets with Open House signs by sponsoring a Nationwide Open House Event. This will give buyers a chance to see a large number of homes at one time. Here is where you can find a list of Opens.

The big news in the Seattle real estate market is that we have seen a sudden change in the direction of the pendulum from being a buyers’ market back toward a sellers’ market! If you look behind you, you will likely see the bottom of the market price drops. The law of supply and demand is taking over and the short supply of desirable Seattle homes is bringing a resurgence of multiple offers and bidding wars.

The good news is that interest rates are still hovering around an all-time low and prices haven’t yet spiked, so buyers are still able to find good homes at reasonable prices. But don’t wait too long; conditions are changing rapidly.

If you are on your own and contemplating the purchase of your first home, you may appreciate knowing that Alice Kuder, REALTOR®, specializes in helping buyers just like you.

If you would like to meet her in person and conduct a stealth interview, she will be holding open a fabulous waterfront home at 5661 Beach Dr. SW from 1-4PM both Saturday and Sunday, April 28 & 29. This particular home is listed by her Prudential colleague, Shari Kruse, for $1.1 million dollars, but don’t let the price intimidate you. Alice works with buyers and sellers at all price points from $75K to $2M. Come by to meet Alice and see this house, even if its not in your price range… just for fun!

Need some basic information about how to get started with searching for your first home? Try this link: 10 Steps to Home Ownership. Or call Alice at 206-708-9800 to arrange a private, no-obligation consultation.

Here are some fun facts and figures about Open House Events from the National Association of Realtors.

 

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More Wine and Wisdom

Posted on April 24, 2012 by Alice Kuder

Wine and Wisdom, our monthly mingle event that brings together home owners and home service professionals, is gaining steam!

Why settle for online reviews when you can meet the professionals live and in person in a casual, fun environment? Wine and Wisdom provides a time & place for homeowners and aspiring home owners to mingle with home service professionals to get expert advice on home projects. Also a great opportunity to conduct stealth interviews with local pros, e.g. contractors, painters, lenders, real estate agents, etc. while sipping complimentary wine and gathering pearls of wisdom.

Mark your calendar for May 16th and plan to join us for a few minutes or the whole hour, 6-7PM at the Prudential Northwest Realty office in West Seattle’s Jefferson Square at 4700 42nd Ave SW, Suite 600.

Are you a business owner yourself? Bring your business cards and do a little networking of your own.

Posted in Events, Home Improvement Resources | Tagged , , | 1 Comment

Seattle Green Home Tour

Posted on April 20, 2012 by Alice Kuder

Looking for something fun and out-of-the-ordinary to do this weekend? Check out the Seattle 2012 Green Homes Tour, happening this Saturday and Sunday, April 21 & 22. And in particular, the West Seattle sites on the tour.

The award-winning West Seattle Blog has all the details, including a map of the five West Seattle sites, so grab your hat and a friend — maybe even the dog — and check it out!

Think that living green is costly? Discover how easy and inexpensive it can be to make your life and home a little greener. You’ll find lots of low-cost, easy-to-implement ideas on the tour. It’s free and self-guided.

Presented by Northwest EcoBuilding Guild.

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UW Mother’s Day Scholarship Brunch

Posted on April 8, 2012 by Alice Kuder

A note from Christy Austin, the event organizer:

We are very excited and proud to have Jean Smart, our Hollywood-success UW grad to be our keynote speaker, along with Michelle Esteban from KOMO TV as our emcee for the event.  This fun day will be on May 12th, 2012 at the Grand Hyatt in Seattle from 10:30 to 12:30.  I am hopeful that you can support our endeavor to raise money for deserving future leaders in our community in need of financial aid.  Whether it’s coming to our event or donating something to our cause, we would really appreciate it!  It should be a fun event, not just for Moms on the Saturday of Mother’s Day weekend, but for all that attended our Alma Mater.  The origin of the words Alma Mater was in 1651, Latin for “Fostering Mother”.  It is thus apropos that we hold the celebration of our school on this weekend.  In the theme of celebration, with the University of Washington’s 150th birthday year, we are looking to create auction items of $150 or more.  This sure-to-be fun event will reach hundreds of attendees along with tens of thousands in audience.  I hope you can participate in some way.

Actress and mother, Jean Smart

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