Facebook
Twitter
Pinterest
Copy Link
Modest Home Updates to “Wow” Buyers & Boost Value
When selling a home in today’s market, it’s important to consider all the options to help make it stand out and appear move-in ready to selective buyers. Which improvements require the least time, effort and expense but will significantly boost your home’s perceived value? To help prioritize, we put together the following list of modest staging solutions/upgrades that will get your property noticed and cost less than the first price reduction that buyers would expect for dated kitchens and baths.
Dining room staged by PJ & Company Staging and Interior Decorating
Freshen Walls With Neutral Color
Our go-to instant fix to brighten and hide dated and damaged walls is neutral paint. It’s amazing to see how a dark red or purple room can be completely transformed with a coat of soft “greige” (a combination of taupe and grey) paint that increases the perceived size of the space, doesn’t distract from the room’s features and acts as the perfect backdrop to modern furnishings and décor.
Kitchen staged by PJ & Company Staging and Interior Decorating
Re-paint Kitchen and Bath Cabinets
To instantly boost a tired kitchen or bath without a costly investment, start by repainting dated and dark cabinets and vanities with bright white paint. Complete the look by pairing with modern hardware – handles, drawer pulls or knobs for added style.
Bathroom staged by PJ & Company Staging and Interior Decorating
Replace Kitchen & Bath Lighting and Countertops
Lighting is an important design element that can affect the mood of a room more than any other accessory. Adding updated lighting in modern designs and on-trend mixed finishes such as brushed nickel, chrome or soft gold tones will add warmth and sophisticated style. It can also be used to draw attention to certain features in the room such as a beautiful new marble or quartz countertop (as shown in photo above), appliances or high ceilings.
Highlight Key Features
For large windows with attractive molding, remove heavier window treatments or simply frame with floor to ceiling neutral drapes. Remove worn carpeting and expose and polish hardwood flooring. Re-stain stairway steps and railings by painting risers or updating spindles. Enhance a beautiful stone fireplace with molding, mantle or screen.
Living room staged by PJ & Company Staging and Interior Decorating
Finishing Touches
Once you’ve invested in cosmetic fixes, be sure to remove dated furniture and accents and replace with more modern style that complement the room (as pictured in living room above). Minimal wall art, vignettes and throw pillows with subtle pops of color and pattern will add depth and warmth so that buyers can emotionally connect and envision living in the home.
Exterior & Curb Appeal
It’s just as important to update the outside of your home to welcome buyers inside. Remodeling magazine’s “Cost vs. Value” report continues to list replacing entry and garage doors, siding and windows as upgrades that provide the greatest return on investment. However, sprucing up the landscaping, making necessary basic repairs, a fresh coat of paint for the front door and some seasonal potted flowers will go a long way to make a great first impression.
For more examples of interior decorating and home staging, visit www.pjstagingdecorating.com.
Source: CB Blue Matter Blog
Moving Day Count Down: A Weekly Checklist
Did you know May is National Moving Month? May is the kick-off to the busiest moving season. In fact, nearly 40 million of us move in the summer and begin to plan in May. If you are one of those on the move this season, we want to help you plan. Unlike the popular perception, moving doesn’t need to be a stressful and overwhelming process! The key is to plan ahead and then the to-dos of moving are very manageable.
Okay, so what are the to-dos and when do I do them? Here you go, use this expert two-month moving calendar to keep you organized. Simply follow these steps and check them off one-by-one. The insider secret to a stress-free move: stay in the know and know what is ahead!
EIGHT WEEKS TO GO:
Start the process of selecting a mover.
Check your mover’s record with the BBB, on Yelp and other social review sites. A great reputation is the best way to choose a mover.
If you’re being relocated by your company, verify what the company relocation policy covers and what responsibilities fall on your shoulders.
Start to inventory your belongings: Decide which items to donate, recycle, to take and which items (if any) need to go into short-term or long-term storage.
Your tape measure is your new BFF – measure all the rooms in your new home, include layouts of doors, closets and windows. Measure all the furniture that is going with you and create scaled cutouts to place in a scaled layout for each room. Once you have finalized a room layout that works, photocopy your final layout for each room. Give a copy to the movers on moving day and tape a copy to each room.
FOUR WEEKS TO GO:
Mail change of address cards or change your information online:
- Post office
- Social security
- Insurance companies
- Credit card companies
- Credit bureau and/or other creditors
- Employer (to forward W2s)
- Car registration
- Broker
- Mail order accounts
- Department of motor vehicles
- Magazines
- Friends and relatives
Arrange to clean furniture, drapes, etc. in your new place if necessary.
Gather personal records (medical, dental, etc.)
Arrange to transfer children’s school records
Gather all pet’s vet records and make sure all pets are micro chipped and it corresponds to a cell number that goes with you on your move.
Order new tags and licenses with new address.
Check homeowner’s insurance policies to see if moving is covered. Be sure your new home is protected by transferring fire, theft and other
personal-property insurance.
Start to pack.
THREE WEEKS TO GO:
Make arrangements to discontinue current utilities and schedule the start-up of new utilities:
- Telephone service
- Telephone listings
- Cable TV
- DSL/Cable/Phone line for internet access
- Electricity (check for refund)
- Gas (check for refund)
- Fuel oil
- House cleaners
- Babysitters
- Dog walkers
- Gardeners
- Pool service
- Diaper service
- Water
- Water softener
- Parking
Have appliances serviced for shipment.
TWO WEEKS TO GO:
Arrange to transfer local bank accounts. Speak to your bank and find out about new checks being printed, etc. Don’t forget your safety deposit box contents.
Ask doctors, dentists and veterinarians for medical records.
Cancel newspaper delivery.
Refill all prescriptions. Get prescriptions transferred to new pharmacy closer to new home.
Make arrangements to move children and pets. Do you need a babysitter for a day or two? A pet sitter?
Confirm that mover will move houseplants; if not, make arrangements. Houseplants, usually, cannot be moved by a mover, especially on long distance or out of state moves.
Start to disassemble any shelving, closet systems, etc. that you plan to take.
If you need one, hire a cleaning crew to clean your empty place to get your deposit back. Will your new place need a cleaning crew before move in too?
ONE WEEK TO GO:
Pack in separate boxes the items necessary for first days in new home: Label “LOAD LAST.” And label where to put each of those boxes in your new home: “top of kitchen counter.”
Medicine (always keep prescriptions on you)
Comfortable clothes
Linens and towels
Toothbrushes and toiletries
Paper goods
Disposable plates and silverware
Foil and wax paper
Plastic containers
Microwave
Vacuum cleaner
Garbage bags
Tool kit
Step ladder
Extension cords
Light bulbs
Cleaning items (mop and pail, broom and dust pan, etc.)
Each member of the family should also pack a suitcase with what they need for a few days while you’re getting settled into your new place.
Don’t forget cell phone chargers, medications and favorite teddy bears.
If the movers are packing all or part of your goods, call to schedule and confirm the details. Make sure your mover knows how much packing you expect to do yourself and how much you expect them to do.
Plan to use up most food items before the move. If you have any leftover food on moving day, donate it to Move For Hunger.
TWO DAYS TO GO:
Defrost and dry refrigerators/freezers to be moved.
Gather valuables and important documents from jewelry cases, safe deposit box, etc. to take with you in car. Do not pack these items with your other belongings.
MOVING DAY:
Moving Out
Arrange to be on hand for last minute details and to give directions to movers.
Leave the whole day for your move. Don’t plan to go back to work, arrange a dinner date, etc.
Have payment for movers on hand. Avoid having to run out to bank, ATM, etc.
Have tips ready for everyone who is assisting you: cleaning crew, doormen, nanny, dog sitter, movers, etc.
Before leaving, check each room and closet. Check garage, basement and attic.
When you leave, turn off lights, close windows and lock doors.
Moving In
Supervise placement of boxes and furniture. Refer to your premade layout. Scotch tape a copy of the layout to each room’s door.
Check for damages. Inspect large items; look for boxes that are crushed or open. Inform the moving foreman and review the claims procedure with him.
Go back to the truck. Make sure nothing was left behind. Check all the compartments where fragile items are often kept for their protection.
Settle in to your new place, take photos for friends and family. A new chapter in your life has just begun! Let the new adventure begin!
Finding Homes for Home’s Best Friend
Nothing compares to the warmth and comfort of being at home. But for many dogs across America, this feeling is foreign.
According to The Humane Society, between six and eight million dogs and cats enter shelters each year. Plus, almost three million healthy shelter pets are not adopted annually, and only about 30 percent of pets in homes come from shelters or rescues.
These sobering facts are what served as the inspiration the Coldwell Banker Homes for Dogs Project. After more than 100 years of helping people find homes, the real estate company extended its mission to man’s best friend with its “Homes for Dogs Project.” By partnering with Adopt-a-Pet.com, North America’s largest non-profit pet adoption website, the Coldwell Banker network has helped to find more than 20,000 dogs their furever homes.
To increase awareness of the effort, Coldwell Banker has focused its latest advertising campaign called “Old Dog New Dog” to capture the heartfelt story of an agent giving back to her community by helping shelter animals find homes through the “Homes for Dogs Project.”
The commercial features rescue dogs, such as Max, who was adopted in 2014 after being spotted on Adopt-a-Pet.com. Before he was put up for adoption, Max was picked up as a stray and delivered to a “high kill” shelter in San Bernadino, CA. The shelter only keeps dogs for five days before it puts them down, and after Max had been at the shelter for four days, a worker reached out to The Dexter Foundation, a local non-profit dog rescue and adoption agency, which quickly rescued Max and found temporary foster care for him.
“I found him on Adopt-a-Pet.com as I was looking for a dog to rescue of that sort of breed and age,” said Kelly Saffrey, Max’s current parent. “As soon as I saw his picture, I just knew he was the pet for me.”
Adopt-a-Pet.com currently has more than 15,000 shelters and rescues in its network, and it is thrilled to be partnering with Coldwell Banker.
“We share Coldwell Banker’s view that nothing turns a house into a home more quickly than the addition of a loving pet,” said Abbie Moore, executive director of Adopt-a-Pet.com. “And we are so inspired by the desire of Coldwell Banker to launch this amazing program.”
For more information on the “Homes for Dogs Project,” head to coldwellbanker.com/homesfordogs
Source: CB Blue Matter Blog
How to Sell a House That Still Has a Mortgage Left on It
Most people won’t live in the same home for 30 years, the typical life of a mortgage loan. So, when it comes time to sell, many homeowners still have mortgage debt to deal with. Is this a problem? What happens to your mortgage when you sell your home?
Once you sign your name on a mortgage loan, you are responsible for the money—no one else. This means that you must pay it back, which you can do with the money you gain from selling your home.
The truth of the matter is that selling a house with a mortgage is a common occurrence. It’s not something you need to be embarrassed or worried about. However, there are a few things you should be aware of and a few steps you should take before you try selling a home that you still owe money on.
Check Your Mortgage
The first step to selling a house with a mortgage is to contact your mortgage lender and ask about your current mortgage. You want to know:
- Your current mortgage payoff amount
- Your due-on-sale clauses
Your mortgage payoff amount is the exact amount of money, including accrued interest that you owe to the bank. This amount is typically good for 10-30 days and represents the outstanding loan balance that you must pay. The last thing you want to do is default on your mortgage.
The due-on-sale clauses reveal the exact rules of how to sell a house you still owe money on. It covers such information as when the paid-in-full loan is due and what the process is, including any fees. The clauses won’t tell you who you can or can’t sell your home to, but they may need some additional information about the buyer’s mortgage lender. Be sure to ask any questions you might have about these clauses, so you have a full understanding before you take the plunge and start your sale.
Selling Your Home
Once you know the ins and outs of your loan terms, it’s time to get to selling a house with a mortgage, which can get slightly complicated. First, you’ll want to work with a title company.
If your current lender doesn’t set you up with a title company, you can hire an agent on your own. This agent will be responsible for ensuring that there are no issues with your property’s title, and act as the intermediary throughout the entire purchase and sale process.
Here’s what happens to your mortgage when you sell your home and use a title company:
- The title agent holds the money from the new buyer during the sale
- After you sign all the documents at the closing table, the title agent uses the sale money to pay your current mortgage holder
- Once the amount has been paid, the title transfers to the buyer and you, as the seller, are given the leftover money (minus various fees)
If the sale covers the full cost of the current loan, it’s a fairly smooth process. However, if you owe more than your home is actually worth—negative equity—there could be some trouble. In that case, you’ll have to work out a deal with your lender for a reduced payoff amount, or you may need to refinance and stay in your home for longer than you planned.
In the end, selling a home with a mortgage shouldn’t be a problem. The most important thing is to know your options, so that you can make the right decisions.
For help throughout the entire selling process, visit www.coldwellbanker.com and find a real estate agent near you.
Narrowing the female leadership gap in real estate
Female agents face an upward mobility challenge within the industry. Here’s how real estate brands and brokerages can work to mend the female leadership gap.
A stark lack of of women in leadership positions exists across all industries. The real estate industry, however, could quickly pivot and become the paragon industry when it comes to representation.
Women have always excelled in the field, but statistically have not found themselves in leadership positions. A report titled How Women Brokers are Reinventing Leadership in the 21st Century from the California Association of Realtors — which recently launched its WomanUP!® initiative and hosts an annual conference — found that women are opting out of large brokerages to forge their own paths.
We should celebrate women entrepreneurs starting their own real estate companies, but as an industry — and particularly within larger companies — we need to take a critical look at why so many talented women with the will to lead are not finding these opportunities within traditional brokerages.
It’s clear that real estate has an upward mobility challenge when it comes to female leaders. According to the NAR 2017 Member Profile Report, women account for 67 percent of all real estate agents, yet only 46 percent of non-selling broker-owners are women.
At Coldwell Banker’s annual Leadership Summit in March, we hosted a panel titled, “When Women Lead,” comprised of women leaders from across the country, with the goal of getting to the root cause of this leadership gap. We found that women in real estate often face two common hurdles: a lack of management training and limited opportunities for leadership positions in their offices.
A one-hour panel didn’t begin to scratch the surface, so we have also introduced a series of virtual conferences with Coldwell Banker agents and brokers to continue the conversation. Hearing from women throughout the network has inspired me to find ways to drive change at both the grassroots level, within each office, and throughout the larger network. In mid-March, I hosted our first “Women of Coldwell Banker,” lunch attended by 100 percent of the women in our home office.
Women with the will to lead have many shared experiences — hearing from others who have achieved success helps us all realize that overcoming challenges is possible, when we identify common hurdles we can find better solutions.
It is also important for men in our industry to rise to the occasion and meet their female peers shoulder to shoulder in this fight. Without allies, making progress towards this goal only becomes more challenging.
Conversations, mentorship and training for women are only part of the equation. To bridge the leadership gap, it’s critical that opportunities for growth are offered to talented women in real estate. Training is only effective once it is applied. Paving the path to management and leadership in real estate will inspire future generations and propel our industry forward.
It is imperative for companies and brokerages to build infrastructure within their companies to provide talented, hardworking women with the tools and training, as well as the opportunities, to lead. Creating task forces, hosting summits and sparking conversation will ignite change — first by providing women with a platform to air their challenges and subsequently by influencing organic change throughout the industry.
So, I challenge you all to do your part in accelerating the real estate industry’s progress in narrowing the female leadership gap. Encourage open conversations among peers within your network. Take an honest look at the growth opportunities available for women at your company. Put pen to paper and develop your plan of attack to combat this issue.
If you’re interested in learning more about working with Coldwell Banker Real Estate, please visit us here.
Source: CB Blue Matter Blog
Five Things You Need to Know About Selling a Condo
Thinking of selling your condo? Whether you live in the condo or own it as an investment property, if you’re ready to sell your home, it’s time to talk to a qualified real estate agent in your area. By evaluating several criteria, including regional markets, time of year, features of your condo unit, as well as your specific needs as the seller, he or she can create a customized marketing plan for your condo. Here are five important topics to discuss with your real estate agent if you want to sell your home:
1. Best Time of Year to Sell Your Condo
The specifics of your area do more to determine the best time to put your home on the market than whether you’re selling a condo or a house. While the conventional wisdom is that spring is the best time for selling a home, this belief simply doesn’t ring true in every locale. In recent years the historic patterns have eased, and in some cases, totally disappeared. Still, different parts of the country have periods when sellers can be more aggressive with their pricing. And your real estate agent may suggest a distinct timing strategy for condominium sales, especially if your condo is in a resort destination.
2. Open House Strategy and How to De-Clutter
A condo that shows well will sell faster and bring a higher price. Small cosmetic touch-ups can make a big difference. Buyers often suspect that more serious problems may exist if they notice the need for minor repairs. If you want to sell your home, it’s important to make sure your condo is clean, tidy and free of personal clutter. Clear sinks and counters of dishes and toiletries. Neatly stack office supplies and organize storage areas. Replace dim light bulbs and clean windows. Even though your garden area may be commonly owned, do your best to create curb appeal by cleaning front steps and porches, and clearing lawns of toys or equipment.
3. Features to Accentuate
One of the best features to accentuate when selling a condo is the lifestyle of ease that comes with condominium ownership. Many buyers are looking for the hassle-free living experience that they can’t find with a single-family detached house. Another important attribute of any condo is the amenities of the association, which can include a hot tub, fitness center, owner’s lounge, covered parking and even concierge services. If you’re considering selling your condo, take the time to walk through it methodically with your real estate agent. Together you can point out which features of the actual condo unit should be accentuated. Does your unit have a wonderful view? Perhaps the location of your condominium is unique and desirable. Your real estate agent can help accentuate these features in sales and marketing materials.
4. Desired Price and Bottom Line Price
When setting the home price for your condo, it’s important to identify your desired price and your bottom line price. By assessing recent condo sale and listing statistics in your area, your real estate agent and a licensed appraiser can estimate your house value and recommend an appropriate target price range. Working with your agent, you can set an initial asking price, as well the absolute lowest home price you would comfortably accept. One advantage of selling a condo is that by assessing the prices of other units in your association that have recently sold or are currently listed, your real estate agent and the appraiser can determine a very accurate house value.
5. Disclosures
When selling your condo, you may be obligated to disclose problems that could affect the property’s value or desirability, as well as to disclose HOA minutes and costs of common insurance and utilities. In most states, it is illegal to fraudulently conceal major physical defects in your property, such as a water heater that leaks severely. And many states now require sellers to take a proactive role by making written disclosures on the condition of the condo unit. Ask your real estate agent for the particular laws of your state.
After reading this article, read more tips on selling a home and make sure you get the best value on your property on Coldwell Banker’s Seller Resources.
Source: CB Blue Matter Blog
How to Get Wood Flooring on Any Budget
Hardwood flooring is often considered a must-have feature by new homeowners or those undertaking a remodeling project. Wood is a natural, renewable resource, plus wood flooring complements all types of home decor, from traditional to contemporary. Hardwood flooring is often considered a must-have feature by new homeowners or those undertaking a remodeling project. Wood is a natural, renewable resource, plus wood flooring complements all types of home decor, from traditional to contemporary. The downside is that wood floors, especially solid wood floors, can be expensive. Some exotic wood species, such as Brazilian walnut, can cost more than $15 per square foot — and that doesn’t include installation labor. However, you can find alternatives that give you the look of real wood at a reduced price — some as low as $2 or $3 per square foot. Here are some of the best budget-friendly hardwood floor choices.
Calculating the Overall Price
The products listed below go from most expensive to least expensive, but there’s a lot of overlap among the categories. For example, some solid wood products are less expensive than some luxury vinyl tiles. Before you make your final decision, factor in the cost of professional installation, which can add as much as $3 to $10 per square foot to the total cost of a flooring project. Some of the items that can drive up installation costs include:
• Removing and disposing of the old flooring
• Repairing the subfloor when necessary
• The size and shape of the room(s)
• Stair installation
If you’re an experienced DIYer, you can save money by installing the floors yourself. Beginners should leave the job to the professionals, though — you may end up making mistakes that are even more expensive to fix.
Solid Wood
This is usually the most expensive option, but there are ways to reduce the cost, especially in the long run. When properly maintained, solid wood flooring will last as long as the house stands. You can freshen up the look at any time by sanding away the old finish and restaining and sealing the floor.
Some wood species are more expensive than others. Fortunately, many of the most common types, such as oak or maple, fall into the low- to mid-range of costs. Solid wood products can come finished or unfinished. If the floor is unfinished, the installer will stain and seal the floor once it is in place, which adds to the installation costs. On the flip side, the prefinished product may cost more up front.
Engineered Wood
These products are constructed of multiple thin layers of material that are bonded together under pressure. The top layer is made from a familiar wood species — such as oak or maple — and is usually treated with a factory-applied finish that resists dirt and scuff marks. Engineered wood floors are less likely than solid wood to wrap and twist because of moisture and humidity, so they can be installed in basements and bathrooms. Some products feature click-in-place installation — no need for adhesives or fasteners — which is an easier, faster installation method perfect for DIYers. However, a vapor barrier needs to be installed or attached to the flooring.
Bamboo
Bamboo floors are manufactured to either look like traditional wood flooring or showcase their distinctive grass-like look. Some bamboo products are harder than solid wood flooring. They are strong and long-lasting, but are easy to scratch and are not recommended for areas prone to moisture. Bamboo is a type of grass and grows to maturity much more quickly than trees do, which makes it a sustainable, eco-friendly option. Click-in-place installation is available for some products.
Porcelain Tile
New porcelain tiles can be made to look like anything, including real wood. Some products are available in planks that have a wood-like texture. Porcelain tiles are an inexpensive, easy way to achieve a “reclaimed” wood look — many tiles mimic the texture and color variation of aged planks. As with regular tiles, they are durable and can be used in wet areas, including bathrooms. They are also stain-resistant and much easier to clean than real wood — spills wipe up quickly, and using just water and a mild soap makes them shine. Porcelain tiles must be installed using mortar and grout.
Luxury Vinyl Tile
As with porcelain tiles, luxury vinyl tile (LVT) can look like wood and come in traditional-style planks. LVTs are thicker and more durable than standard vinyl. They are usually waterproof, are easier to clean than true hardwoods, and can be installed in any room in the house. To prolong their durability, many LVTs are treated to resist color fading and scratches.
Laminate
Laminate floors are composed of a high-density hardboard core protected by a melamine layer that can be made to look like anything — including real wood. The top layer protects against dirt and scuff marks, but the material should not be installed in rooms that are exposed to moisture. Click-in-place installation is available.
Hardwood flooring is a classic, timeless look that fits a wide range of design options. Thanks to today’s selection of flooring products, it’s easy to get a wood look at a lower cost. When making your final decision, be sure to include both the material costs and the installation costs. That way, you’ll get the look you want at a budget-friendly price.
DIY author Fran Donegan has written several books, including Paint Your Home. He also writes for The Home Depot about homeownership and projects that add value to your house. To see a selection of hardwood flooring options like those described by Fran in this article, please click here.
This article is editorial content that has been contributed to our site at our request and is published for the benefit of our readers. We have not been compensated for its placement.
Source: CB Blue Matter Blog
Can First Time Home Buyers Use a 401k For a Down Payment?
Coming up with a down payment to purchase your first home can feel like a herculean task. How can you possibly save twenty, thirty, fifty thousand dollars—approximately 11% of your home purchase price in 2016 (National Association of Realtors)—to pour into a house? For most individuals, it can be incredibly tough to save enough, particularly if you’re strapped for cash. What can you do?
The good news is that if you’ve been consistent about saving for your retirement, you have a leg up thanks to the two 401k first time home buyer options. These options allow you to supplement your down payment with cash from your 401k. However, not everyone qualifies to use money from a 401k. There are strict rules, so it’s vital that you understand how the process works before you move forward.
Borrowing from 401k
When it comes to borrowing from your 401k to help with your down payment, there are two ways to go about it:
- Get a 401k loan for home purchase
- Make a 401k withdrawal
Each of these options comes with its own costs and rewards. Remember that everyone’s financial situation is different and the best way to make the right choice for your situation is to contact a financial advisor and a skilled real estate agent.
401k Loan
First, let’s talk about getting a 401k loan for home purchase. The good news is that, when getting a loan, you don’t owe income taxes or the 10% early withdrawal fee. The bad news is that when you take a loan, it has to be repaid with interest even if you’re just paying the money and interest back out of your own pocket.
However, unlike a typical FHA loan, borrowing from 401k is fairly limited. Your max loan is limited to a specific dollar amount OR one-half of your account balance, whichever is smaller. This means that you need to know your current vested balance.
As for repayment, your 401k loan must be repaid within five years, and payments are required on a quarterly basis—both principal and interest. And your loan payments DO NOT count as contributions to your 401k.
Please note, not all plans permit loans. You’ll need to check with your particular plan to see what is allowed. Additionally, before moving forward with this option it’s advisable to check in with a financial advisor to ensure this option is right for you.
401k Withdrawal
The second option for a 401k first time home buyer is a withdrawal. Compared to a 401k loan, it’s much simpler. The money is yours once you take it out and it does not have to be repaid. But there are a few more details. To withdrawal money from your 401k, you have to meet a few criteria including age restriction and financial hardship.
Only if your employer allows withdrawals and you can prove to the IRS that you are experiencing financial hardship can you even consider withdrawal. From there, your withdrawal has a certain dollar limit, and you must pay income tax on the full amount.
The other option for a withdrawal is to cash out on an old 401k. However, if you use this option, you’ll be required to pay both the 10% early withdrawal penalty as well as income tax.
Before you pursue this path or cross it off, be sure to get the opinion of a financial advisor who has access to your personal financial details.
401k Loan vs. Withdrawal
In most cases, a 401k loan may be easier to obtain and doesn’t come with the penalties associated with an early withdrawal. Of course, the downside is that you’ll eventually have to pay it back in five years.
So, why would you use your 401k to help purchase your first home?
Depending on your financial circumstances, this option may be more financially feasible than paying private mortgage insurance, and the interest goes back in your pocket. Another option is to use your IRA to avoid the 10% penalty. IRA withdrawals up to $10,000 are allowed without the 10% early withdrawal penalty, though you’ll still owe income tax.
If you need help figuring out the best option for you when it comes to putting together your down payment with your 401k, contact your personal financial advisor. Then contact a local Coldwell Banker office to find the perfectly priced home for you.
Buying a House as a Police Officer, Firefighter, or EMT
Police officers, firefighters, EMTs, and teachers give so much to our country. They selflessly put their lives on the line to protect us, take care of our children, and help us accomplish our dreams. So it’s only right that they have the same opportunity to achieve their own American dream of buying a home.
Unfortunately, even though these public servants are working tirelessly in essential roles, they often have a difficult time purchasing property. Too often, it’s just out of reach financially.
The good news is that thanks to a range of public and governmental programs, these public servants have more opportunities than ever to buy a house at affordable rates and through a simplified process. There are options for tax breaks, down payment help, subsidized mortgage interest, and reduced closing costs. It’s all about making homes for heroes a realistic venture. Let’s talk about what’s available!
Mortgage Loan Assistance
There are many different private home loans for teachers, health care professionals, and rescue workers, and law enforcement personnel. These loans typically offer the lowest mortgage rates possible—though it’s still important to shop lenders to find the best deal.
One such program is Freddie Mac’s Home Possible Program, which offers first responder home loans that finance up to 100% of the purchase price. There are also similar programs offered through Fannie Mae and many other private banks. We recommend checking with lenders in your area.
You should also check with your state and/or city to see if there are similar programs. For example:
- New Jersey offers first responders a discounted mortgage rate that can be up to a full percentage point less than the market rate
- Alaska has a program for health care and school workers that finances 100% of a home’s purchase price and includes subsidized interest rates
Mortgage Credit
Beyond lower interest rates and financing 100% of your home, the IRS offers Mortgage Credit Certificates (MCCs) to help make homes for heroes easier to purchase. This credit differs from state to state but can enable teachers, police, firefighters, and EMTs to buy a more expensive house with the same income.
How does it work?
An MCC allows you to deduct your mortgage interest and gives you credit against tax liabilities. This means that your lender will subtract the credit from your house payment when calculating your debt-to-income ratio so that you can get a larger loan.
For example, let’s say you get a 20% MCC and you paid $15k in interest over the last year. That’s a credit of $3k per year, or $250 per month. That means that you can afford a home loan that’s $250 per month more expensive than otherwise.
Teacher Next Door’s First Time Buyer Program
Thanks to the Teacher Next Door’s First Time Buyer Program, there are home loans for teachers, firefighters, EMTs, and police officers only. What does this program include specifically?
- $0 in application fees and up-front pre-approval
- Low down payment options and down payment assistance
- Closing costs grants
- Home loan assistance
This program was designed to increase home ownership for specific public servants and to streamline the home buying process. As for the grants for police officers to buy homes and others, they do not have to be repaid and are subject to availability.
HUD Good Neighbor Next Door Program
Finally, there’s the Good Neighbor Next Door program offered by the U.S. Department of Housing and Urban Development (HUD). This program provides full-time firefighters, law enforcement professionals, teachers, and EMTs homes at 50% of their value. That means you pay monthly mortgage payments on just $150,000 for a $300,000 house ($850 versus $1600 per month).
How does it work?
- Buyers have to be willing to live in the property for at least three years
- The property must be located in a HUD designated area, which refers to a Revitalization Area as determined by home ownership rates, average household income, and FHA foreclosure activity
To learn about additional assistance programs for public servants, contact Coldwell Banker today. Our real estate agents can help you find the perfect home for you.
