Tag: homeowner tips

Lake Home Financing and Equity: What You Need to Know

Posted on Staff

Home equity, or the difference between the value of your home and what you still owe, is a key component of your finances.

Your equity can act as a financial cushion for emergencies, or provide your family with a healthy nest egg for the future. In fact, building equity is one of the first steps to accruing wealth.

Equity is awesome, and there are a million online articles that report what it is, why it matters and how to cash in on it. However, there isn’t a lot of information about effectively building equity on lake homes, most of which are secondary homes.

Let’s take a look at some key factors that actually matter when it comes to your lake home’s equity.

Equity and Down Payments

When buying a home, the larger your down payment, the more equity you’re starting out with. Hefty down payments also ensure lower mortgage rates, which is always a plus.

Ideally, 20 percent is the golden standard, but it’s certainly not a requirement. According to Zillow’s 2017 Consumer Housing Trends Report, only a quarter of buyers pay 20 percent of their home’s price upfront.

Most lenders will accept as low as 3 percent, although it’s best to put down as much as possible. A disadvantage of smaller down payments, however, is they yield a premium–private mortgage insurance (PMI)–to cover the extra risk that lenders take.

When it comes to secondary homes, however, there are a few more factors that go into down payments and building equity.

Qualifying for a mortgage on a secondary home is exponentially harder. Lenders assume that, in the event of hard times, homeowners are more likely to default on their vacation homes than their primary residences.

This means inevitably more resistance and red tape in the home buying process.

Buyers should expect to provide at least a 20 percent down payment in the case of good credit (725 to 750, typically). For lower scores, up to 35 percent down isn’t unheard of.

Lenders take a deeper look at your debts compared to your household income, sometimes including full income and asset documentation. There are also higher interest rates and tighter guidelines on second homes.

This would explain why, in 2018, 39 percent of vacation home buyers paid cash. It’s simply easier to do so for those who have the means. And paying cash eliminates the need to build equity, since it’s already at 100 percent from the start.

However, equity in a lake home isn’t as liquid as on primary residences. Since vacation homes are seen as luxury properties and not necessities, they may take longer to sell.

This means that in the event of a financial emergency, it won’t be as easy to tap into your lake home’s equity for help.

Use Rental Income to Pay Toward Your Principal Balance

For those who are in no hurry to cash in, though, there’s a clever way to build equity faster.

In addition to a host of taxes and fees, mortgage payments also cover interest and principal balance. As in general real estate, the faster you pay off the principal balance, the faster you build equity. That’s assuming, of course, your home value stays the same or increases.

The following is an example from LendingTree.com. Let’s pretend there’s a $300,000 house–with a 30-year mortgage at a 4.5 percent interest rate–that Person A bought in March of 2018.

Below is the difference between the standard repayment schedule and how fast Person A could pay it off by putting $500 per month toward his or her principal balance.

                                                        Courtesy of LendingTree.com

As you can see, an extra $500 per month toward her loan’s principal balance saved Person A more than $107,000 in interest. It also allowed him to pay his home off nearly 12 years faster.

The good thing about owning a secondary, or vacation, home is you don’t need to pay the mortgage all by yourself.

In 2014, vacation rental owners charged an average rental rate of $1,520 per week ($217/night). That translates to an average residual annual income of $27,360 for the owners.

Using rental income to pay off your lake home’s principal balance is a smart financial move that requires minimal effort, aside from cleaning costs. Renting the property out for a few months a year means the house basically pays for itself.

When paying your mortgage, remember to specify how much you want to go toward your principal. Keep in mind to check with lenders and ensure that paying off your home faster won’t result in prepayment penalties.

Make Some Home Improvements

Making some improvements around the house not only makes it easier to sell later, but builds equity.

However, while some updates can help you, others simply cost more than they’re worth. Therefore, it’s important to consult a real estate professional before investing in home improvements.

According to Realtor.com, some common updates that show a negative return on investment include master suite, bathroom and deck additions. While these projects may be glamorous and popular, they often cost twice as much as their resale values.

Realtor.com advises “less is more”. In fact, simple tweaks like attic insulation, garage door replacement and minor kitchen remodeling offer the best returns on investment.

Landscaping, bathroom improvements and fresh coats of paint can help increase the value of your lake home, too. Sellers would benefit from energy-efficient updates and smart home additions as well.

 

Lake home owners face different obstacles when it comes to home financing and equity. But if done right, you could ensure financial security for years, and generations, to come.

Repairing a Hole in Drywall

Posted on Staff

man repairing drywall on ceiling

Holes in drywall can be repaired fairly easily, with a minimal amount of equipment and work. Most homeowners can accomplish this with just a few tools.

Drywall is also referred to as plasterboard, wallboard or sheetrock.

Follow these steps in order to repair and conceal drywall holes of all different sizes.

Repairing a Large Hole: 4 to 6 Inches

You can get ready-made patches for drywall. These are available in different home supply centers and hardware stores.

Most offer a “peel-and-stick” type and most patches also have metal backing for additional strength.

If the hole was caused by door knob or other high-speed object, a patch can certainly hide it. However, it may not be strong enough to hold up if there is another impact. If that is the case, then you will need to get a new piece of drywall.

To install a drywall patch, follow these steps.

  1. First, clean the edges around the hole. Trim away any loose or frayed pieces using a utility knife.
  2. Shape or cut the patch carefully in order to fit your hole. Be sure to leave a border of extra backing around the patch in order to attach it to the wall that surrounds the hole.
  3. Clean and then dry the hole, to allow for maximum adhesion. If there are any greasy areas, you can clean them with some tri-sodium phosphate, found in the paint section of a hardware store. You can also just use soapy, warm water. Get the drywall damp enough to clean, but not soaking wet.
  4. Apply the patch to the wall, and smooth out the taped edges with a putty knife.
  5. Use a wide blade putty tool in order to spread a very thin layer of compound over the area.
  6. After it is dry, gently sand the patch to blend it into the wall and repaint.

Repairing Medium-sized Holes: 2 to 4 inches

If the hole is small, you may not need to use a patch. Instead, you can just use some joint compound, also found at a hardware store.

To apply:

  1. Clean up the area using a utility knife, and then trim away or press back any loose bits that are hanging down.
  2. Wet the repair area using a spray bottle. This will help the compound stick to the wall. This step can be skipped if you are using a non-water-based compound.
  3. Once your wall is clean and just a bit damp, apply a good amount of the compound onto a putty knife. Using a wider putty knife will produce a smoother result. Fill the hole and make sure there aren’t any gaps. It’s fine it it sticks out a little – that’s what the next step is for.
  4. Smooth out the compound using a putty knife. Hold the blade at roughly a 30 degree angle from the drywall, and pull it towards you in just one steady motion.
  5. Sand gently afterward, and repaint the section of wall if necessary.

Repairing Small Holes: Less than 2 inches

Smaller holes are very easy to repair, and can be unnoticeable if done correctly. You can use either non-shrink drywall compound or spackle.

  1. Clean up the area that needs to be repaired. Trim away the edges.
  2. Wet the area very lightly.
  3. Using a liberal quantity of the compound or spackle and a putty knife, cover the small hole and fill it in.
  4. Ensure that you smooth out the edges to blend it to the wall.
  5. Sand it down and paint over as needed.

 

How to Restore Your Home’s Curb Appeal

Posted on Staff

multi-story lake home on the waterfrontYou know that great curb appeal your house had when you first bought it? Is it looking a little haggard?

Maybe the paint is fading, or peeling. The gutters are bulging from dead leaves or this winter’s monsoon.

Maybe the porch has settled, and is drifting away from your house.

There are lots of things that can happen to a house that make it look, well, not so great. Here are a few quick tips to get your house back into curbside appeal mode.

Under Pressure

Power wash your house.

Rent a power washer, buy one, beg a friend or relative. Whatever you have to do, power wash the exterior panels, siding, or bricks and windows all the way around your house.

This removes the stuck on grime, and also gets rid of leaves, webs, and general yuckiness that tends to stick around.

Power washing is really quick fix to make your house sparkle on the outside.

Paint the House Red

Well, maybe not red unless you’re really going for a bold statement.

But if you notice your paint is peeling or fading, invest in a paint sprayer, or hire a professional.

Do touch-ups throughout the year, or just plan on one huge project in the summer when it’s nicest.

A fresh coat of paint has the power to make a house look brand-spankin’-new.

Get Your Head Out of the Gutter

Clean your gutters, people!

Stuffed gutters can cause structural damage, leaks and costly repairs if your gutters get so heavy they fall off. It happens.

Instead of letting it get to this point, clean your gutters out especially during spring and fall when all the new or dead leaves are falling from the trees.

If notice a bird’s nest or other blockage, get up there and clean it out. If you are not able to, hire someone that is.

Trim The Bushes

Landscaping is a great visual addition to a spruced up home exterior.

If you already have landscaping, maintain it. Trim the bushes, trees, or hedges and keep the flower beds weeded and grass mowed.

It’s amazing how much nicer a house looks when it’s got a well-kept yard.

If you have dirt instead of grass, think about investing in sod, grass seed, or having a landscaper do it all for you.

Clean Up

Don’t be that neighbor; get your car off the lawn, your trash bags off the porch, and your kids toys off the sidewalk.

Tidy up after you have a party on the lawn, and don’t let junk accumulate on your property.

It sounds simple, but so many people underestimate how much nicer their house looks from the outside when people aren’t greeted by a lot of junk at the curb.

Don’t Forget Your “Shore Appeal”

The term “curb appeal” refers to how your house looks from the street, or curb.

With a lake home many times the “front” of the house may be oriented towards the lake.

If this is the case make sure you make the appropriate side of the house your priority. Also, include your dock into the equation.

Make sure that any year-round furniture is secured, there is no clutter such as life vests or fishing supplies, and that your boat is secured and orderly.

Hopefully after reading these tips, you’re motivated to get out there and clean!

Do the easiest steps first, and build up to the big projects, like repainting or landscaping. Then, you can enjoy the view every time you pull into your garage or driveway.

 

5 Indoor Decor Ideas For Your Lake Home

Posted on Glenn S. Phillips

Living on the lake is a wonderful place to live. However, it is important to the appeal of the home to be decorated in a proper manner. Depending on your personal style, you can choose from a list of different styles. Here are 5 decor ideas that are bound to suite every taste.

Bright White Lake House Theme

bright white decor ideasThis type of theme offers a crisp and clean area to relax in. It is bright and inviting. Create this by adding in white chair covers, table clothes, and more. Other pieces of furniture that are not white should be black metal.

For example, if you are decorating your dining room, the chairs should be black metal and the table should be covered with a simple white tablecloth. This theme gives a soft, yet clean feel to any room of your lake home. It is often used for the family room, dinning room, or guest room.

Playing Up the View

You can make the most of having the lakeside view by keeping your windows and sliding doors free of drapery. Purchase furniture that matches the serene lakeside view.

For example, if you have location that provides many trees, then the best furniture type is made of wood and not metal or other unnatural colors. Keep the colors to a natural tone and it will add to the amazing view that your property has to offer.

Durable Furniture and Matching Scenes

There are many people who choose wicker furniture to offer a homey scene. However, wicker furniture will not stand up to vigorous usage. There are other options for this like rattan furniture. It offers a wicker pattern using a more durable material.

These come in different colors like grey, black, and brown. In order to mesh the scene the outside and inside has to offer, purchase brown rattan furniture. It will help the flow of view and offer cozy seating for you and your family.

Modern Style with Earth Tones

Earth tone decor ideasIf you like the more modern styles, then you can still have this. If you use earthy colors, you can still offer a mesh of the surroundings from the outside and in.

Shades of greens and browns are great. You can purchase pillows and other items like table clothes that includes a modern pattern, but still sticks to the earthy tone of the lake home surroundings.

Unique and Cozy

If you want more color when it comes to your décor and furniture, then paint your walls white. Having red pillows with any other color of wall will offer chaos to your eyes.

Keep the walls white should you choose a more exciting and busy theme. For a cozy appeal, you can purchase a comfortable brown sofa and place mixed pattern pillows on it for a unique and personalized style.

No matter what you choose for your lake home, it is important to keep in mind that you can use the outside to add to your theme. If you use drapes to add color, then keep them open to include the outside view, while you relax on the inside.

Should You Consider Refinancing Your Mortgage?

Posted on Glenn S. Phillips

RefinancingThere are any number of reasons to refinance your existing mortgage or mortgages. Start by considering what you hope to get out of a refinance and whether a refinance will save you in the long run.

If the list of reasons to refinance is longer than the list of reasons not to, or if your cost savings will be significant, then it’s a good time to consider refinancing.

What are some of the reasons to refinance your current mortgage?

*  First, if it gains you a better interest rate and/or it changes the term of the mortgage, then a refinance makes good sense. No refinancing plan will ever pay off your debt; rather it modifies the current loan. Lowering the interest rate is one of the top reasons people refinance. Now that banks are more willing to lend to people again, even those who owe more than their home is worth are more likely to be eligible.

*  Debt consolidation is a second reason. Some people have a lot of credit card debt that runs them hundreds of dollars a month in minimum payments. It makes good financial sense for some to refinance their mortgage and lower the overall amount they pay each month. Also, if you have a home equity loan or line of credit as well as a mortgage, it sometimes makes good sense to put the two together. This will lower the payments each month.

*  Third, many people got into loans with attractive entry level rates that then ballooned when the adjustable rate portion kicked in. Being able to lock in their interest rate at a consistent rate for the remainder of the loan period is very appealing and should be strongly considered.

*  Another major reason is because people need some extra cash. Though it might not necessarily be a refinance, a restructuring of an existing loan can mean a substantial check sent to the homeowner. This can be used to start a business, care for an aging parent, buy investments, or do home repairs.

*  Sadly, sometimes a divorce can mean a need to refinance, if for no other reason than to remove the other spouse’s name from the title. It sometimes helps the person who will be staying in the house by giving him or her a lower monthly payment, since now there is only one income paying the bills.

Some factors to consider when refinancing include the costs of the fees and any title paperwork filings. These can sometimes eat up any savings that might otherwise be realized.

Also consider that the house will still always be the item the bank holds as collateral. This can be especially important if the refinance is being done as a way to get additional funding for something else and not just saving money each month.

For many, though, refinancing can be a good answer to a tough financial situation.

Don’t Forget to Winterize Your Lake Home

Posted on Glenn S. Phillips
Winterize Your Lake Home During winter

When living on a large body of water or a lake, it seems like the elements provided by Mother Nature are amplified.

As winter comes, there are several steps that you should take to help protect your lake home from these elements. Some of the harshest winters can be found on some of these lakefront locations.

It doesn’t matter if you decide to ride these elements out or if you want to batten down the hatches and wait for spring. These precautions will save you time and money when the warmer months arrive.

Follow these simple steps to winterize your lake home.

Continue reading “Don’t Forget to Winterize Your Lake Home”

How to be the World’s Best Lake Neighbor

Posted on Glenn S. Phillips

No matter whether you are new to the area or you have lived alongside your lake for decades, it’s always important to be a good neighbor. You can choose your friends, but you can’t choose your family. Or, the people you live next to. Here are a few tips to make living on your lake a pleasant experience for everyone. And, to make you the world’s best lake neighbor!

• If you live in a neighborhood with a homeowners association (HOA), the board will help enforce some standards about house and lawn maintenance. Trash in the yard will not be allowed, and neither will that bright pink roof.

If you don’t live in an HOA, don’t allow old lawn mowers or boat parts to stack up in your front yard. Your storage shed should also be tucked away and out of sight so your yard will be presentable at all times.

• Pets are great, but usually only if they are yours! If you have a pet that likes to wander, you will want to find out what it needs and try to get that for them closer to home. A “catio”, otherwise known as an enclosed patio, gives your cat that chance for breathing the fresh outdoor air, but she won’t be able to go over to the neighbor and torment his Chihuahua.

If instead you have a dog prone to barking, it is a good time to learn how to redirect that energy through an obedience class.

• Welcome newcomers to the area with a gift basket, but with added lake flair. Include a lake map, a gift card to the local marina, a list of nearby service providers, and a personal note explaining the ins and outs of the area.

• Be cognizant of your neighbors when it comes to parking cars. If you have a number of cars in your family, you may wish to let the neighbors on either side of you know. It’s also a good habit if you are having a party or get together to make your neighbors aware of the increase in the number of cars for that event.

• Be a person. In this digital age, it’s easy to shoot a message saying “Happy Birthday” or “Congrats”, but instead, walk next door and deliver the message yourself. Doing things like this in person carries much more weight than a Facebook post, and your neighbor will be very appreciative of your simple actions.

• Are you the local expert angler? Offer to take newbies on a fishing trip to share all your fishing hot spots.

• If you build on your property make sure that you are aware of just how big your structure really is. A tall tower or treehouse meant to give the kids a great hideout may prevent your neighbors from seeing out one direction or another. And you certainly don’t want to obscure the view of the lake, since after all, that lake is the big reason you all moved there.

• One of the big things that neighbors often argue over is where the property lines are really located. It’s very important to get a proper assessment from your county planning or land use office. With GPS tracking now, getting the boundaries right is easy. With that document in hand, no neighbor can succeed in disputing just where that fence can go.

• Finally, if you really want to be the world’s best lake neighbor, organize neighborhood “dock parties.” Think of it just like a block party. Instead of celebrating on the block, celebrate up and down the neighborhood shorelines by boat and on each others docks! This is a great way to get everyone together and do something as a community. All while enjoying the lake that you all love!

In the end, the easy way to think of neighbor relations is to adhere to the golden rule – treat others as you would wish to be treated. Then, act accordingly.

Five Reasons Your Lake Home Needs A Landline Phone

Posted on Glenn S. Phillips

Landline phoneThe Chicago Tribune estimates that around 40% of all homes nationwide no longer have a landline phone.

There are still plenty of good reasons to maintain a landline, especially if you own a lake home.

Here are four reasons why you should consider maintaining a landline phone at your lake home.

#1. Works when the power is out

Homes near the lake are susceptible to power outages, which is why it is especially important to install landline phones in them. Should the power go out, you’ll still have a means of communicating with others, and might be able to obtain help much sooner as a result.

#2. No bars, no worries

Cell and VoIP phones are notorious for poor or weak signals and static or tinny echo effects that make it difficult to carry on a conversation. These things can be an even bigger problem near a lake, especially if the lake is in a remote area.

Clarity is never a problem with a landline, so you never have to worry about a lack of cell coverage.

#3. Secure your privacy

The problem with wireless phones is the fact that they can easily be intercepted. This can happen in a number of ways, including:

  • The use of rogue cell phone towers to divert and capture data
  • “Bluejacking”, which involves sending unsolicited information to Bluetooth-enabled devices
  • Hacking of computers in order to “spy” on VoIP phone calls

Cell phone conversations may also be audible by others who are using ham radios, police scanners, and similar devices. Radio equipment like this is often found on boats, making it possible for someone to hear your conversation while cruising past your residence. Landline phones are less penetrable and are far more secure than cell phone technology.

#4.  Provides more reliability for security

Many alarm systems these days must be synced to a landline in order to work properly. The reason why so many security companies require this is because they know how dependable a landline actually is compared to a VOIP or digital phones, which are susceptible in power outages.

First responders can easily pinpoint your location because a landline transmits its address information directly to the dispatcher whenever you call 911.

In the age of cell phones and Internet, there are still plenty of good reasons to maintain a good old-fashioned landline phone, especially in lake homes. Whether you’re looking to buy a lake house or already live on the water, you can benefit from installing a traditional landline, even if you predominantly use other forms of communication.

Tips for Maintaining Your Lake Home in The Off Season

Posted on Glenn S. Phillips

It’s getting to be that time of year when the days are shorter and the shadows are longer. That means it’s time to start planning to seal up and begin maintaining your lake home for the offseason.

This is one of those cases where effort spent in the late summer and early fall will save time and money as the season changes and the temperatures start to drop.

If you’d like making the house maintenance during the off-season a little bit easier, we have several tips that can really simplify maintaining your lakefront home in the winter months:

Continue reading “Tips for Maintaining Your Lake Home in The Off Season”