Wealth Building Through Homeownership

Wealth Building

One of the primary objectives of owning a home is to let the home appreciate over time and become a pillar of a family’s financial strength.

But before we can discuss “wealth”, we need to identify the steps to get there.

First Step

Having “Emergency Cash” is the first step. It’s having $5-7,000 liquid for life’s inconveniences (the furnace breaking down, the roof needing to be replaced, the car needing work, etc). When faced with the inevitable challenges that arise, many people are forced to run to their credit cards to make it through. They become stuck with high interest rate, non-tax deductible borrowing.

Second Step

The second step is the elimination of “Bad Debt”.  “Bad Debt” is any debt whose interest is not tax deductible. Obviously, those high interest rate credit cards must be paid first, but we also want to eliminate the car loans, boat loans, student loans, and personal loans.

Third Step

Shockingly, when you arrive at this step, you will be considered in the Top 5% of Americans in terms of financial security. Step three is accomplished when you have 3-6 months of your total expenses in reserves.  The average homeowner (who is logically financially better off than the non-homeowner) has less than one month’s expenses in reserve! When life shows them more than a minor inconvenience (like a job loss, an illness/disability, or worse), most people are in a panic situation. With 3-6 month’s reserves, you will have time to weigh options and make better decisions.

Fourth Step

True financial security is attained when you become “Debt Free”.  But not without debt.  “Debt Free” is when people have enough liquid assets to pay off whatever mortgage they have outstanding.

Bottom Line

Please take the time to investigate all that is possible, by harnessing the POWER of a mortgage to help you move your family towards wealth. Work with a loan officer who can educate you on the power behind properly leveraged real estate via tax savings and reallocation of equity.

Kitchen Backsplashes

 

Your kitchen is traditionally where people spend most of their time in their home.   Making it functional and aesthetically pleasing is typically a priority.  Features that help with clean-up chores also lets you enjoy your time in this room.

Kitchen backsplashes are meant to provide protection from unwanted stains due to food, soap and hard water.  Cooking, for all its variety, can be the source of splatters and smudges.  People like me clean up any kind of spot immediately while others let it ride until one day they decide that enough is enough and try to get everything clean again. In time, if not protected, the area around your sink and stove can deteriorate or become permanently stained.

Kitchen backsplashes to the rescue

Chances are you already have a backsplash or painted surrounding area and clean up almost automatically. New kitchen backsplashes can provide an improved surface for cleaning and perk up the ambiance to make things more functional and attractive. Among steps you can take to beautify your kitchen, backsplashes represent one of the easier remodeling jobs especially if you like to do it yourself. They also cover a pretty large area and tend to be noticeable. There are degrees of difficulty in installing kitchen backsplashes:

1. If the current surface is painted or wallpapered, you can simply repaint, use peel-and-stick wallpaper or a veneer-like laminate to cover the surface. Variety in designs is immense and you can probably match the finish of your cabinets although it might result in too much sameness. A clear plastic covering over the chosen covering can make the surface impervious to any kind of grime.
2. Continuing along the lines of covering up, you can install ceramic or granite tiles although the process can be messy and measurements are critical. The receiving surface must be prepared to receive the new material. Tiles come in varying sizes including border tiles to assure good fit. They can also be decorative presenting flowers and other appealing designs. A rough drawing with precise measurements can provide a guide for acquiring the tiles. The Internet has many good websites to illustrate DIY techniques.
3. To go beyond the simpler techniques, stainless steel can provide a clean look such as you find in commercial kitchens. It can also make cleaning a breeze. The job normally requires a professional since cutting and installing take special skill. However, with good measurements you can buy pre-cut stainless steel sheets and DIY.

Upkeep of kitchen backsplashes

Once your new backsplashes are in place, care and maintenance can keep them looking like new for a long time. A mixture of vinegar and warm water will work on most surfaces and some baking soda mixed with water to make a paste will help clean grouting where tiles are concerned. You can also find good commercial cleaners designed to protect your particular installation.

Protect your credit score.

5 tips to protect your credit score

There was a time, not so long ago, when a credit score of 720 would have been enough for you to be approved for the best mortgage rates. That’s history. In today’s economy, you need to post a score of at least 760 (out of a possible 850) to be considered for those desirable interest rates, for a conventional loan. Plus, the FHA loans are more lenient with credit scores. You can qualify for an FHA loan with a credit score of 640.

It doesn’t take much to chip away at your credit score. Here are five tips to preserve your creditworthiness.

1.  Avoid making late payments.

Even one late payment, whether it’s a week or a month, can cost you up to 110 points on your credit. Pay attention to due dates and, whenever possible, pay early.

2.  Keep your balance low.

While you need to use your credit to build a history that lenders can view, don’t overdo it. Your total debt should amount to no more than 30 percent of your income. Carrying a big balance will send up a red flag to a potential lender. Pay down your balances and you should see a boost in your score.

3. Keep your credit cards, even if you’re not using them.

You might think you’re doing the smart thing by reducing the number of credit cards you’re carrying, but cancelling cards changes your debt to utilization ratio. If, for example, you have three credit cards and each has a $2,000 limit, that’s a total of $6,000 in available credit. Let’s say you are carrying an $800 balance on one card and zero on the others. Your debt to utilization ratio is 13.3 percent, and that’s a good number. But if you cancel those other two cards, you reduce your total available credit to $2,000 and your debt to utilization ratio soars to 40 percent. You’re better served to tuck those cards away and not use them rather than cancel the accounts.

4. Don’t open new credit lines.

When you apply for a new line of credit, the company checks your credit report, and this inquiry automatically lowers your score a bit, maybe by five points. In addition, once you open the account, you could be sacrificing up to another 15 points until you prove yourself worthy by managing this credit wisely. Don’t collect credit cards; apply for what you need and avoid the temptation to accept more.

5. Don’t default on a loan.

No one wants to default on a loan, but it happens. Home foreclosure could cost you 90 points and bankruptcy can take away as much as 250 points! If a default is unavoidable, start rebuilding your credit as soon as you can, by following the first four tips.

Don’t let your dreams of home ownership be crushed by a low credit score. If you need advice, talk to us at ANTONELLI CONSTRUCTION We can help get you back on track!

Homes – New vs Existing

New Home versus Existing Re-sale

5 things to consider before buying a home

Are you struggling with determining whether to buy a new home or go with a resale? The shift in the economy has created a shift in home buying, so there are more advantages now than ever to consider a new home.

1. Energy efficiency is built in. Rather than retrofitting an existing home to incorporate energy savings—like quadruple-paned windows, heating and cooling systems, and insulation—you build smart, right from the start.
2. Save on home repair. Moving into a new home means no existing wear and tear. You won’t be looking at replacing your roof or carpeting, painting the exterior, or updating your kitchen or bathrooms.
3. You’re covered by warranty. Your new home and its contents–including appliances, plumbing, electrical, flooring, and roof—are covered under warranty. Consider the cost of replacing any of these items when calculating the true cost of buying a resale.
4. Get what you want. Do you want a larger kitchen? Maybe it would be great to have a first-floor owners suite. A buyer of a resale rarely finds the perfect home. Rather than compromising your dream, work with a custom home builder to adapt the floor plan to your desires, and not the other way around.
5. Reduce your home maintenance. Today’s new homes are built with the busy homeowner in mind. Materials like composite products require minimal care while still looking great.

When you add up all the advantages that come with buying a new home, a resale just can’t compare.

Spring Cleaning Tips

 

‘Tis the season for SPRING CLEANING. Here are a few helpful hints for making your de-cluttering projects a breeze—and a few tips on how to keep your house organized after you’re finished:

1.    Find something that motivates you to get started (this is the hardest part). Sometimes upbeat music, or maybe some caffeine can help. Or perhaps you just need to look at your mess for motivation.  Whatever it is, it’s time to start!

2.    Start out small. Tackle one room at a time. Some prefer to start with areas that bother them most.  Maybe you prefer to start with the most cluttered area. Or the smallest room. Either way, start with one manageable space at a time.

3.    All of us hold on to items that are sentimental to us. Maybe it’s the T-Shirt you got while you were on vacation ten years ago, or maybe it’s a present an old friend gave you. Whatever the cherished items, find a small box to keep them in. Once that box is full, you’ll have to be selective and choose your favorites.

4.    Another reason that we hold on to certain items is the “what if” factor. “What if I need to wear this dress to a special occasion one day? What if the new toaster breaks down? I better keep the old one just in case.”  This can be ok to do in some cases, but put a time limit on it. If you haven’t worn something in a year, you probably won’t wear it again. If you must hang on to a spare item, give it six months. If you haven’t used it, get rid of it.

5.    As you root through the clutter in your home, there are going to be things that you need to keep.  The best way to make room for what you need to keep is to get rid of the things you don’t. However, that isn’t always possible. Find ways to organize the pieces you need. This can come in the way of a plastic tote for the closet or garage, or maybe a new shelf for the family room. Depending on your needs there are very fashionable, or very “storage-like” pieces at your disposal. You decide what’s best for your space.

6.    Clean as you go. As you are picking through the needed and unneeded items inside and outside of your home, it doesn’t hurt to bring along some cleaning supplies. You may as well be shining things up as you go. That way when your job is complete, you’ll feel like everything is clean through and through.

7.    Donate and discard your unwanted items right away.  The longer these items sit inside of your home, the more time you have to decide to hang on to them, or you may even begin to build clutter around these items.  Don’t give yourself a chance.  Get rid of everything as soon as possible.

Now that your de-cluttering process is complete, think about how your home became cluttered in the first place. Much of the time, the reason we have clutter in our homes, is because we don’t realize that it is there. It has been there so long that it starts to become part of the décor. Stop this pattern before it starts. When you get junk mail each day, throw away/recycle what you don’t need. If you see a pile of magazines stacking up. Throw out the ones you’ve read immediately. If you try on a shirt that no longer fits right, donate it. Don’t wait for the clutter to take over before you do something. Stop it before it starts. Happy Spring Cleaning!

Ice Dams

The Problem

Remember, 90% of all problems in a home are associated with water!

Ice dams form when melted snow refreezes at roof edges. Anyone who has lived in cold climates has seen ice dams. Ice damming is a serious problem where melting snow re-freezes at the eave causing a dam. More melting snow accumulates and water has the potential to migrate into the home.  Shingles are designed to shed water by overlapping and allowing gravity to pull the water off the roof.  With ice damming, the weight of the accumulated ice and snow actually causes the melted snow to move uphill- between the laps of shingles and eventually into the home.

The Cause

Three things are required for an ice dam to form: snow, heat to melt the snow and cold to refreeze the melted snow into solid ice. Ice dams can form when as little as 1 or 2 inches of snow accumulates on a roof – if the roof is poorly insulated and air sealed, and the snowfall is followed by several days of sub-freezing temperatures. Ice dams develop as snow on the upper part of the roof melts. Water runs down the roof slope under the blanket of snow and refreezes into a band of ice at the roof’s edge creating a “dam”.  Additional snow-melt pools against the dam and eventually leaks into the building through the roof or roof trim.

The General Solution

The damage caused by ice dams can be controlled in 2 ways: Maintain the entire roof surface at ambient outdoor temperatures or build a roof so that it can’t leak into sensitive building materials if an ice dam forms.

Cold roofs make a lot of sense. Here you let the cold outdoor air work for you. Keep the entire roof as cold as the outdoor air and you solve the ice-dam riddle. Look at the roof of an unheated shed or garage, a pile of lumber or an abandoned home. Ice dams don’t form on these structures because there is no uneven melting and freezing!

• For new construction it is elementary. Design the house to include plenty of ceiling insulation, a continuous air barrier separating the living space from the underside of the roof, and an effective roof ventilation system. Insulation slows down the conductive flow of heat from the house to the roof surface. An air barrier slows down the flow of heated air to the underside of the roof. And a good roof-ventilation system helps keep the roof sheathing cold.
• In an existing house this approach may be more difficult to follow. Often you are stuck with less than desirable conditions with different construction methods.

Insulation: Houses in the northern United States should be equipped with ceiling insulation of at least R-38 (about 12 inches of fiberglass or cellulose). The insulation should be continuous and consistently deep. The most notable problem area is located above the exterior wall. Raised-heel trusses or roof-framing details that allow for R-38 above the exterior wall should be used in new construction. In existing structures, where the space between the wall’s top plate and underside of the roof sheathing is restricted, install high R/inch insulating foam (R-6/inch). Be sure to seal the insulation at this point to prevent warm-air leakage from the living space.

Ventilation: A soffit-to-ridge ventilation system is the most effective ventilation scheme you can use to cool roof sheathing. Power vents, turbines, roof vents and gable louvers just aren’t as good.  Soffit and ridge vents should run continuously along the length of the house. A baffled ridge vent  is best because it will exhaust attic air regardless of wind direction. The exhaust pressure created by the ridge vent sucks cold make-up air into the attic through the soffit vents.  A 2-inch space or “air-chute” should be provided between the top of the insulation and the underside of the roof sheathing in all applications.  The in-coming “soffit” air washes the underside of the roof sheathing with a continuous flow of cold air. CAUTION: Be sure to install insulation baffles above the exterior wall to protect the insulation from the air that blows in through the soffit vents.

Air Leakage: Insulation slows down conductive heat loss, but a special effort must be made to block the flow of warm indoor air (convection) into the attic or roof area.  Small holes allow significant volumes of warm indoor air to pass into attic spaces. In new construction avoid making penetrations through the ceiling whenever possible. But when you can’t avoid making penetrations or when you need to air-tighten existing homes use urethane spray-foam (in a can), caulking, packed cellulose, or weatherstripping to seal all ceiling leaks like:

• wire penetrations, plumbing penetrations, ceiling light fixtures,  attic hatches, chimneys,  bathroom exhaust fans,  and the intersection of interior partitions and ceilings

Get Organized – Closet Storage and Design Tips

Closet Storage and Design

We all must have a gene that makes us buy too much and keep too much. This is not uncommon, especially here in the U.S. Take for instance the fact that 1 in 10 Americans use self storage facilities. There are presently 2.21 billion square feet of self storage space, enough space in which to to stand 100% of all of the population of the U.S. Self storage is a 22 billion dollar industry (per Inc. Magazine).

But that’s not what I am going to tell you about. What do we do with all the other stuff we have at home? That is something we all need to know more about. So here are some tips on designing your spaces to be more efficient and a lot neater – tips to consider as you plan your next home or are remodeling your existing space.

Closets and storage are needed in almost every room of your home – foyers, bedrooms, bath rooms, studies, laundries, pantries, playrooms and even garages. Closets are something you use everyday. Rarely do your guests use your closets, and since they are rarely seen by others, unfortunately they don’t get the attention they deserve – the attention that you deserve too. Your life will be a lot more convenient and a lot less frustrating by making these personal spaces work for you, rather than the other way around. With some careful planning and consideration you can make those daily routines a pleasure rather than torment.

First things first. It’s a new year – time to clean out the old. Go through your closets and drawers and make a pile of what you are going to keep and what you are going to donate or trash. Now you can see how much you have to store. Note how much of it needs a long hanging space such as overcoats and full length gowns. How much is a short hang, such as shirts and blouses and folded pants?  How many shoes do you own ? Now you have a fair idea about how much space you will need. Don’t hesitate to call in a professional closet designer who can tell you the best ways to store everything you own.

Here are some basic design rules and tips:

• Throw out what you don’t need or use.
• If you take something down, put it back as soon as you are done.
• Put the most frequently used items in the most accessible positions in the closet.
• Place infrequently used items up on the top shelf of the closet or to the right and left of the door.
• Roll some clothes up to take up less room and make them easier to find. Roll up items such as underwear or socks or t-shirts.
• Reach-in closets should be a minimum of 24” in the clear (sheet rock to sheet rock). I prefer at least 26” and if you have bulky coats 30” is even better.
• Install wide doors on closets when possible. Spaces to the right and the left of the door are not easily accessible.
• Use regular swing doors instead of bi-folds or sliders. There is very little that can go wrong with a swing door. On wide openings, use two swing doors and install dummy door knobs with bullet catches in the top jamb.
• Hanging clothes take up 24” front to back.
• Walk-in closets (WIC) need to be at least 75” wide if you hang clothes on each side.
• Drawers in WIC’s require 24” clearance in front of them to be accessible.
• An 24” deep island in a WIC requires at least 120” (10′) in the clear from wall to wall with hanging rods on opposing walls – 24” hanging + 24” clearance at island + 24” island + 24” clearance at island + 24” hanging.

There are four components to a closet – short hanging, long hanging, shelves and drawers. The rest are accessories, such as shoe racks or tie racks. Decide how much of each you need. None of the same type of components should meet at the corners, i.e. don’t join a hanging rod to another hanging rod at the corner.

• Many times a short hanging rod can be doubled up, one over the other. If you do this, place the top rod at 85” above finished floor (AFF) and the second rod at 42” AFF.
• Long hanging items should be 85” AFF.
• Pants hung from the cuff need to be 54” AFF.
• Put double hang rods in the most accessible portion of the closet.
• Put drawers in very accessible areas of the closet.
• Shelves can go over most hanging rods and everywhere else you don’t have drawers or hanging rods.

Lighting tips:

• A closet needs to be well lit. Some codes will not allow incandescent bulbs in the closet because their heat might be a fire hazard, in which case you can use fluorescent, compact fluorescent bulbs or LED lighting.
• If you have no windows in the closet, and you have access to the roof or attic above, install a sun tunnel to admit natural lighting in almost any weather.
• Install rope light under the toe kicks of cabinetry or under the leading edge of the shelving.
• Install a light switch on the outside of all your closets.
• It is nice to install a 4” low voltage recessed light just outside the door of a reach-in closet, as well as interior lighting, so you can see yourself better. Put these lights on a single switch.

Accessories: There are many accessories that you can put in a closet such as a garment bag valet, a tie or belt valet, shoe racks, etc. Consult a closet shop for a detailed list.

Amenities: You may want to have an ironing board in the closet, or a TV to watch while you dress. A dressing mirror is also a very handy item to put in your closets. You can even put your washer and dryer in there. It all depends on budget and the size of the closet.

I hope that these tips will lead you towards a better life this year.

When you are organized at home, you are bound to be more organized and disciplined in other areas of your life.

Best of fortune.

Protect Your Largest Financial Asset

Adopt a Contractor and Protect Your Assets

If you are sitting on a million dollars or half a million dollars or even $200,000, you might consider getting advice from a financial advisor. With that kind of money, you’d want the best advice on how to grow your investment. During your first session with him you are going to go over your goals and ambitions, what assets you have, and when and how you plan to retire. With this information, your advisor will put together a plan to help you achieve your goals. You may put some of the money in stocks, some in bonds and some in annuities. At certain milestones you’ll change the funds from one place to another to maximize your return. Most of you will stick with your advisor for life, if he does a good job for you. Having a good financial advisor turns out to be a good move for you and your family.

We’ve all heard that most people’s homes are their largest assets. This is repeated in many ways, and in many circumstances. We’ve heard it so many times that it is rather a cliché of sorts, and we don’t give it that much thought. All we know is that when the time comes to sell our homes, we hope to get a good return on our investment.

So, how many of you have hired a financial advisor to protect your home, your largest asset in most cases? I’m guessing that very few have. Most live by the “If it ain’t broke, don’t fix it” rule. When you think about this philosophy, as far as your house goes, it’s plain dumb. Take a look at car maintenance for instance. Do you perform routine preventative maintenance on it? Sure you do. You don’t want to be stranded on the side of the road somewhere. What if the airlines adopted that philosophy? Now that’s scary. Nobody would want to fly anymore. So why let your house rot, and then fix it. Why have your furnace fail on a cold night, and then fix it. Why let your home decrease in value when it could be increasing in value with routine maintenance.

I think you get my point by now. Routine maintenance on your home is very important, not only financially, but also in terms of your comfort and convenience. You need a trusted advisor to look over your entire home and see when certain parts of the home need to be replaced or serviced. You need to know when the repairs or maintenance will be needed and how much it will cost. It’s time to —– Adopt a contractor!

Just as you hired your financial advisor, you need to interview a few contractors and get references. She or he need to be experienced with all facets of your home. I would suggest a full service remodeler, possibly with design-then-build experience. They need to know what products are best, and how they should be installed and who should install them. A good contractor should be surrounded by experts in all fields. She or he should have built relations with the best in the business, so you get the best advice and service when it is needed.

Your home is a system. Everything in your home has to work together. Your home’s function is to keep you warm and dry, safe and comfortable at all times. It is an envelope that protects you from the outside world. Find a contractor that understands this; one that can see the big picture, and will guide you toward the best possible return on your investment. This should be a long term relation, so that your contractor becomes familiar with your home and your lifestyle and you know what to expect from your contractor. When you find such a person, life will be so much better. Now you can set up an annual budget for the future maintenance needs of your home and schedule them at your convenience.

Your contractor may not wear a suit and tie, but he may well be the most important financial advisor you’ve ever hired.

by Chattanooga Remodeler.com on January 23, 2011

What Costs More – A Ranch Style Home or a 2-Story Home ?

The Ranch Style Home is the Most Costly Style Home for the same square footage.

With only one floor,  it would seem logical that a Ranch would be less expensive than a 2-story home right…but this is a very common misconception among buyers.

The reasoning  is simple.   The basement foundation and slabs along with the roof are larger on Ranch Homes.

In a Ranch home, all of the square footage is on one floor therefore the basement and roof are double what they would be in a 2-story Colonial of the same size. Colonials are simply more economical to build and can guarantee to give you a larger home for less money.

Of course, if a Ranch is the home of your dreams, there are ways you can keep your home more affordable. A helpful hint to keeping costs down in any home is to focus on structural items rather than surface items. Surface items such as flooring or counter tops can be changed anytime, however raising your ceilings from 8 feet to 9 feet would be impossible after the fact. If you are on a budget (and most people are), this is a good rule of thumb.

Also, consider looking at homes with more of a rectangular shape, simple rooflines and standard windows compared to a complicated roof with lots of gables or a hip roof. This will without a doubt keep more money in your pocket. Using simple things like house colors and landscaping to enhance the look of your home will always give you a great looking house for less.

Heath Care Repeal

Business owners have said the new 1099 reporting rules would be too time-consuming for businesses to meet. Senators  Baucus and Reid said Tuesday, they hope to pass a repeal of these rules with strong bipartisan support.  So far, they have attracted one Republican co-sponsor: Sen. Scott Brown of Massachusetts.

http://www.accountingtoday.com/news/Baucus-Reid-Pledge-Repeal-1099-Requirements-57029-1.html