Cost of Home Improvement

One of the effects of the recent recession is that home improvement contractors are now offering their services for considerable lower fees. This means that the cost of home improvement is not as high as it used to be and a lot of homeowners are taking advantage of it.

After you might have decided on a home improvement project for your house, the first stage is the planning stage. You need to have a clear idea of what improvements you would like to do and where everything should be. If you are adding a new patio, have a clear vision for the design of the patio and put your plans down in a concise manner. After that you will need to determine the cost of home improvement.

The cost of home improvement depends a lot on the materials that will be needed for each project. Things like the cost of wood, pipes, paint, tiles and the like all reflect on the cost of home improvement.

Therefore in determining the cost of home improvement, you need to settle on what materials you would need for the project.

Professional services will also impact on the cost of home improvement. You need to take into consideration building costs, installation and fitting prices, plumber, electrician, painters, decorators and other home improvement professionals’ fees will all go into the cost of home improvement. It might be useful to find out current industry prices and the cost of materials so that you have an idea when you are planning.

On the other hand, bearing in mind that costs and prices could vary, depending on the home improvement project you are undertaking, you should get a home improvement company to handle most of your home improvement needs. The reason for this is that a home improvement company will already have the materials needed for your home improvement project and might have discounts on offer.

Furthermore, you could get cost estimates from them for the cost of materials and the cost of labor. Finally, they will have a competitive warranty program to protect you should anything go wrong with your home improvement.

Home improvement is a necessity if you are a home owner. The cost of home improvement will always depend on your budget and what sort of work you want done on your home. The projects will cost a bit of money but the cost of home improvement is seen as an investment towards the value of the house. When and if you do eventually decide to put your home on the market, your home improvement will significantly increase the value of your home.

Shawn Hickman is the Search Marketing Manager for Sears Home Improvements. If you would like more Home Improvement Ideas, visit the Home Improvement section of the Sears Home Services website.

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Tips on Financing Rental Properties

If you’ve ever purchased or refinanced a home you likely have first-hand experience on just how elaborate the process can be. Certain lenders may follow Freddie Mac’s guidelines, others Fannie Mae’s, while portfolio lenders may have their own set of underwriting criteria. There really is not a “one size fits all” checklist of guidelines when it comes to financing investment homes. Yet, there are some common themes which most lenders tend to follow. Below is a list of some of what you can expect during the rental property loan process.

Preparation – Like with any residential home loan, lenders are going to want to see proof of income, employment, and review a borrower’s credit history to ensure the applicant is in good financial standing and will have a solid chance to remain so. Be prepared to document several weeks or months worth of pay.

Paystubs should include the date range of pay (ie. day-month-year to day-month-year). For self employed borrowers, two years of tax returns is the norm. If you plan on using rental income to help qualify, you’ll likely need to show that income in your tax returns. Basic rule of thumb…if it’s not reported, you’re likely not going to be able to use it.

Down Payments – Back in 2005 there were lenders out there who where offering zero down investment property loans. Fast forward to 2011 and most lenders now require at least 15% down (see Fannie Mae Purchase Guidelines 2011). The majority of the lenders that we talked to for this article stated that they require 25% down for purchases and no cash-out refinances.

Credit Score Requirements – Credit guidelines will vary between lenders. According to Fannie Mae’s 2011 product matrix, borrowers must have credit scores of at least 680 for the purchase of a single family investment property if they are putting down 15-25%. If they are putting down more than 25%, 620 is the floor. For other investment property scenarios most of Fannie Mae’s minimum credit scores fall in the 660-700 range. You’ll need to consult with a licensed mortgage professional to verify credit requirements.

Number of Units – Both Fannie Mae and Freddie Mac will finance residential investment properties with 1 to 4 units. Guidelines for 1 and 2 unit properties are often less conservative than those for 3 and 4 unit homes. Often times the greater number of units corresponds to higher credit score requirements and larger down payments. Anything over five units is typically considered a commercial property and a commercial financing instrument would be needed. Commercial loans tend to have more conservative lending guidelines than those applied to residential loans. Because many lenders portfolio their commercial loans, there can be a greater potential for more creative financing options.

Using Existing Rental Income to Qualify – Various lenders will have different criteria on how rental income may count. Many lenders require a two year rental history, and the income must be reported in a tax return. Obviously if a person is seeking to purchase a rental property this is not going to be an option. There are lenders out there who may count rental income if a buyer has a signed lease and has collected a security deposit and one month’s rent. Sounds tricky, it can be.

Financing rental properties can be more intricate than what you might expect from buying or refinancing a primary residence. The good news is that there are plenty of lenders, brokers, and banks out there who are ready, willing, and able to assist buyers and rental property owners. Contact a licensed and reputable mortgage professional in your area to gain greater insight into what it takes to buy and refinance investment properties in today’s marketplace.

Nat Criss is a marketing professional with CMG Equities, LLC, an online mortgage rate research web site where consumers can learn about a variety of home loan programs including investment property mortgage financing and rental property mortgage loans.

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