Go Green With Tankless Water Heater

Homeowners who are concerned about the environment as well as saving money have many options when making upgrades to their home.  One of the lastest in eco-friendly, efficient, and  economical appliances are tankless water heaters. The Department of Energy or DOE tells us that hot water usage, specifically heating the water, is the 3rd largest day to day expense in the home. If you are looking to be more energy efficient and cut back on utility expenses, you may want to consider purchasing a tankless water heater.

If you are unfmailar on conventional water heaters work, they will keep your water hot 24/7, while an on-demand system, using the tankless approach, only heats water when you need it. An efficient gas burner quickly heats cold water traveling through the system to a preset temperature.

There are several common manufacturers of tankless water heaters – check out www.smarterhotwater.com, sponsored by Rheem. They tell us that annual costs for conventional water heating and storage (average) can be as much as $285, where the costs for tankless are more than $100 less per year on average.

So why haven’t we all converted? Tankless water heaters cost more up front – sometimes as much as twice more than traditional water systems. But adoption is growing as consumers become more and more concerned with efficiency and long term value for their dollars. Here’s a few reasons to consider going tankless:

1. Energy friendly and efficient. On demand systems can reduce energy costs as much as 25%.
2. Reliable and convenient. You get a continuous supply – imagine never running out of hot water!
3. Sleek and small. No more bulky tanks taking up valuable storage. Typical tankless heaters aren’t much bigger than a small suitcase.
4. Life expectancy.  Tankless water eaters are built to last  – 20 + years or more.
5. Versatility. It’s size and operating system allow you to place nearly anywhere in your home that is convenient for you.

Tankless water heaters are expensive, as noted and can be expensive to retrofit. If you are purchasing a new home that you plan to say in for a long time, the savings and benefits are worth the expense. If you are in a short term arrangement, the conventional water heaters may still be all you need for now. Also, avoid electric style tankless heaters – the gas units are much more efficient and affordable.

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Residential Appraisal Components and Misconceptions

One of the requirements that mortgage lenders will request during the home buying process is a real estate appraisal. For many first time buyers, there may be some misconceptions as to exactly what this is.  A real estate appraisal is a detailed report that is created by a licensed appraiser in your state and establishes the market value of a residential property. This is a very important aspect and several different considerations go into an official appraisal, and it forms the basis of the bank’s determination of the loan value. While appraisals do consider market comparisons, the actual appraisal value comes from much more than a market analysis.

Here are the components of a residential appraisal:

  • Property details
  • Comparisons  to at least three similar properties
  • Evaluation of the market conditions in the area
  • Environmental conditions that could decrease the property’s value
  • Structural issues that could decrease the property’s value
  • Estimate of time on the market
  • Status of the home site – new development, established neighborhood, acreage

Common misconceptions

  1. Appraisals aren’t the same as home inspections
  2. Appraisals are owned by the lender and not the buyer
  3. Assessed values don’t necessarily match market value
  4. Realtors do not provide appraisals
  5. Consumers do have the right to question appraisal facts and contest them

Understanding the neighborhood and ‘comps’ are an important part of your buying experience, but you are also bound to the official appraisal given to the lender. Work with your realtor, lender AND appraiser to make sure you understand all the details in the appraisal report of your new home.

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Home Loan Denials

The current real estate market is one that favors buyers. Record low interest rates, low home prices and a large inventory are all favorable for potential homebuyers looking for a new home. The problem facing thse homebuyers is that is obtaining financing for a new home can be a challenge in this difficult economy. Many mortgage lenders have tightened their requirements. However, it is important for homebuyers to realize that it isn’t always the lenders fault. Of course they would like potential customers to assume that they will be approved but the loan industry is a very risky one right now and they have to protect their assets.

Many potential homebuyers are finding that their application has been denied, so if you have been denied recently or in the past for a loan, it’s time to take control of the situation. Educate yourself, ask questions and do your research to help change that NO answer to a YES answer! Here, to help you out are some suggestions.

  • Consider a co-signer if your income simply is not high enough to qualify for the actual loan. The co-signer’s income can possibly be considered as an amount towards your loan regardless if the person is living with you or helping you pay the actual bill. In many cases, the cosigner might also be able to compensate for your low credit. It is important however to understand that there are risks for your cosigner and if you default on your mortgage, the lender can actually in turn go after your cosigner for the full amount!
  • Wait it out.  Sometimes the best advice you can get, especially if the conditions in the housing market is slow or the economy is bad, is to simply wait. Oftentimes when conditions improve in the economy, the lenders will be more willing to let you “borrow” the money for your loan. While you are waiting, you can take this time to work on your credit score. While you are waiting, home prices could also drop!
  • Consider a less expensive property. We all want what we want, but you might have a better chance of being approved if you switch to a less expensive option. For example, if you wanted a house, but you cannot wait and you cannot qualify for the loan, you might consider switching to a smaller home or to a town home instead. Later on down the line when your financial situation improves, then you can trade up the property and move to the location and home you really want to.
  • Apply with a different lender. The world is full of lenders, if you don’t like what one says or you get denied – try someone else! However, if every single lender you go to denies you, you should become aware that it is for a reason – in fact, if they all list the same reason then you will know what you need to fix.  Use common sense and stay away from predatory lenders. We have heard some pretty scary stories about these places – so just don’t do it. You could literally be signing your life away.

If you are denied, it is important to not give give up and keep trying! Work on your credit and then in a few months try again! With a little time, patience and understanding, you could be able to turn the situation around to your favor!

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HAFA Programs From Fannie Mae and Freddy Mac

Everyone understands that we are in the midst of a difficult recession and  struggling economy and it is effecting people all over the country. The unemployment rate is steadily on the rise and has an astounding effect on the real estate market.

Thousands of  home owners are feeling the pinch and struggling to make their monthly mortgage and many owe more than their home is worth.  A home owner in this situation usually finds that their best option is to do a  “short sale,” in which their lender agrees to accept less than a full payoff to release the mortgage. Short sales is a solid option to foreclosure, it alleviates financial and emotional strain for all involved

There are programs designed to help, HAFA is a Federally sponsored program that provides incentives to lenders that agree to short sales. Because short sales typically are a lengthy process, HAFA is hoping to streamline and standardize the short sale process. Unfortunately not all home owners will be eligible and not all lenders that participate in the program.

Recently both Fannie Mae and Freddie Mac announced they will implement their own type of  HAFA Program and will be very similar to the original HAFA program. Their programs will work like this: distressed homeowners will need to apply for a mortgage modification under the federal HAMP program and the programs will then offer incentives to homeowners and lenders to complete a short sale such as  $3,000 in “relocation assistance” offered to homeowners for completing a short sale.

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New Threat For Homeowners After Short Sales and Foreclosures

Homeowners who have been able to sell their home as a short sale often feel a sigh of relief to be out from under the burden of their home loan debt. However,  it may not be that easy for both short sales and foreclosures as lawsuits against these homeowners may be increasing in the future.

According to several real estate and legal analysts, it is anticpated that lenders will file a tidal wave of lawsuits against homeowners in the next few years as a way to recoup losses when home sales or foreclosure auctions don’t result in enough money to pay the mortgages in full.

Under Florida law, banks have five years from the date of the sale to file for so-called deficiency judgments and up to 20 years to collect. Lenders can garnish wages or make claims on borrowers’ assets. These types of lawsuits were virtually unheard of before the real estate market turned, mainly because foreclosures and short sales  were relatively rare at the time.

Homeowners who are at the most risk of being involved with these lawsuits can include those homeowners who ransack properties or even those borrower’s who walk away from “underwater” mortgages.  According to a recent survey released by Trulia and RealtyTrac, four out of 10 homeowners said they would consider abandoning properties that are underwater, or worth less than the mortgages. Lenders hope to discourage these behaviors by filing these lawsuits.

On the other hand, most mortgage companies typically won’t sue homeowners who negotiate in good faith or those who default on their loans because of job losses or other unforeseen circumstances, said Anthony Manno, an executive with Steelbridge Real Estate Services. The Miami-based company works with lenders on the resale of foreclosed homes. Still, borrowers shouldn’t rely on a lender’s verbal commitment, Manno said. “Get something in writing.”

A forgiven mortgage balance through 2012 is not considered taxable income on a primary residence as long as the debt was used to buy or improve the house. But borrowers who walk away from investment properties risk having to pay federal income taxes on the forgiven amount.

Homeowners who hand their properties back to the bank through so-called deeds in lieu of foreclosure also should make sure they won’t be on the hook for any mortgage debt.

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