Hello Team! Update: Here it is, the Self Defense Merit Badge we'd talked about! We have several individuals who are in line to receive this upon obtaining a working knowledge of 11 of the 21 techniques on the Self Defense Card. Hang in there...
6-4-17 5:30 pm - Woody's Pizza Clarksville Professionals Having FUN....
An evening of social networking to allow fellow Meetup members to get to know one another and learn how together we might mutually benefit one another. Very relaxed atmosphere to talk, share ideas professionally and to meet founding groups leaders.
Join us for our regular Cryptocurrency talk and some pizza. You don't have to have a background in cryptocurrency to join us, everyone is welcome. We'll talk about what's new and coming in the world of Bitcoin, Ethereum, Dash, Monero, or whatever...
Whether you are preparing every course from scratch or hosting a laid-back Thanksgiving potluck, make-ahead recipes are key. Many dishes can be prepared at least a day in advance and simply reheated right before serving. Aim to have everything—from the traditional hors d’oeuvres to the homemade bread to your family’s favorite Thanksgiving dessert recipes—done by the time you start preparing our simple turkey recipe.
When a dog named Hank navigated 11 miles home over two days to his foster owner in Memphis, TN, recently, it had many of us thinking, “Awww, isn’t that sweet,” and marveling anew at the navigational powers of pets. How do these animals—without maps, GPS monitors, or the ability to ask for directions—find their way home?
Hank is hardly a fluke, either. In 2013, a cat traversed 200 miles over two months to reach its old stomping grounds. Meanwhile, seabirds and tortoises travel entire hemispheres when they migrate to the same old nesting areas season after season. As for how they do it, it depends on the species.
Cats, for instance, rely on magnetic fields, orienting themselves along the Earth’s north-south poles much like a compass, according to scientists interviewed by Time magazine.
Meanwhile, dogs lean heavily on their sense of smell. Had Hank walked those 11 miles, he could have just followed his scent trail home, Bonnie Beaver, executive director of the American College of Veterinary Behaviorists, told Time. Or, if a dog were taken by car, as Hank was, it might rely on overlapping circles of familiar scents.
Does that mean you need to make a Costco run for loads of air fresheners? Not so much. The pup might pick up a whiff of a dog it knows, which leads it to a well-known tree or trash can.
How to keep your pets safe at home
While the power of pets to return to their owners’ arms may be astonishing, scientists point out that we shouldn’t overestimate their abilities, either. Dogs like Hank make the news; hundreds more don’t because, well, they stay lost.
In other words, pet owners should continue doing what they can to keep their furry friends from wandering off. That means keeping your cats indoors, installing sturdy fences for dogs, and outfitting all animals with a collar and ID tag. Even high-tech pet microchips will run you only $25 to $50, and could be worth the peace of mind of knowing that these four-legged members of the family have a built-in ID. Because after all, even if Fido or Fluffy can find their way home, why not make it a little easier on them?
When you’re house hunting, finding an amazing house in your location of choice that doesn’t require much additional investment seems like a huge score.
But is it really? Before making an offer on that picture-perfect home, take a look at the surrounding houses. If they’re all in disrepair—or just obviously less nice than the one you’re considering—you might be buying the most expensive house in the neighborhood.
Maybe that seems awesome because you’ll get bragging rights and price of place! But more than likely, it’s going to hurt you. Here’s why.
Someday you’ll need to sell it
When you’re in the throes of buying a home, it’s easy to forget that the place you’re busy buying will someday be the place you’re selling. And when it comes time to sell, unloading the priciest home on the block will be a challenge.
“A lot of buyers forget a home is an investment,” saysBrendon DeSimone, a real estate expert and author of “Next Generation Real Estate.” “The world changes. Things happen fast. People transfer, people lose their jobs. Now imagine yourself as the seller of that home.”
So you’re hanging by a thread: As it is, someone might buy it—after all, you did—but there’s no way to increase your equity in the home. With your house already significantly nicer than its neighbors, any upgrades (however minor) will send it into the stratosphere. That quality mismatch between your home and the surrounding homes will lead most buyers to pass on it. If they’re going to spend that much money, why wouldn’t they buy a home in a more desirable neighborhood?
The best you can hope for is your home holding its value. The worst-case scenario: You can’t sell it.
“You can change your house, but you can’t change your location,” DeSimone says.
You need to leave room for improvement
As we said before, a home is an investment—and the best investments have the most room for improvement. Ideally, you’ll be adding to the home during your ownership, building equity in hopes of a payoff when you (eventually) sell.
That’s why DeSimone actually recommends buying the worst house in the best neighborhood. Yes, you read that correctly.
“You can add value on your own,” he says. “If you’re choosing between an awesome house in a crappy location or an awful house in a great location, I would choose the latter.”
Note that “improvement” doesn’t necessarily entail a complete renovation. Even the small changes that happen when you—a responsible person—move in will increase its value. We’re talking about things such as regular maintenance, refreshing the paint, and fixing the odds and ends that might go ignored by another occupant. But if your home is already priced well above the rest of the neighborhood, those tiny changes won’t make a lick of difference.
You can’t bet on the neighborhood to improve
If you’re buying the nicest house on the block hoping the neighborhood will improve, you’re putting a lot of stake in a volatile market—and you’re more likely to be disappointed (and possibly even go broke).
Ideally, the chain of events goes like this: You buy your nice home in an up-and-coming neighborhood. Over time—thanks, gentrification—the homes around you improve until all of your neighbors are pretty much on the same footing. Because the area has improved so drastically, your home’s value will still increase.
It’s a wonderful idea, and it is certainly realized occasionally. Too bad Magic 8 Balls don’t really work. For each time this strategy works, there are a dozen others in which homeowners end up with an overpriced, unsellable home in a middling neighborhood.
If you’re eager to live in a neighborhood with potential, “buy a bad house,” DeSimone says. “At least you can improve the interiors and make it more valuable. If that neighborhood doesn’t actually‘up-and-come,’ your expensive home is already as viable as it can be.”
Sometimes, betting on your home can pay off—but risking your home? That strategy might sacrifice everything.
If your home has you down in the dumps but you lack the cash to fix it up, don’t despair! Not every upgrade has to take a big bite out of your bank account.
Here are seven foolproof ways to make your home feel like a totally different place through small changes—and small expenses.
1. New hardware
Swapping out the boring chrome hardware the previous owners installed can go a long way toward making your home look like yours—not to mention give the entire space an easy, inexpensive refresh. Depending on your style, new pulls or handles can cost mere dollars.
“The first thing I do to give the home more of the look and style that I like is swap out the hardware,” says Doug Mahoney, who worked in construction for 10 years and now writes about tools and home improvement for The Sweethome. “All it takes is a screwdriver, and it’s surprising what a difference it can make.”
2. Small paint jobs
Don’t have time to repaint your entire home? Start by tackling smaller jobs such as your front door or kitchen cabinets. Since these projects are quick, you can squeeze them in during the weekend (or even an afternoon). And you’ll use only a fraction of a gallon of paint (which costs between $15 and $30)—making for an ideal impact-to-expenses ratio.
“Personally, I can’t stand the look of polyurethaned oak cabinets, so I’d cover those up with a nice white paint,” Mahoney says. “It makes it look like a whole new kitchen.”
If you like your cabinets, consider repainting the trim in your living room or adding some fresh color to a small room such as your bathroom.
3. Sensor lights
Tired of scrambling for the light switch while your arms are holding bags of groceries? Add sensor lights to your front porch and any other regular entrances such as your garage door. Starting at just $15, it’s a tiny cost with a big reward.
These lights won’t just improve your visibility—they’ll also lower your electricity bill. And they’re a big home safety boon to boot; experts say motion-detecting lights discourage criminals from lurking around your home.
4. Magnetic door catch
Speaking of those arms full of groceries: Adding a magnetic door catch (like this onefrom Amazon, which costs $11) to your primary entrance drastically simplifies loading and unloading. No more awkward sideways crab walks as you attempt to keep the door open while carrying a big package. You might even consider installing this before moving day to make your movers’ job easier.
5. Keyless entry pad
If you’re always losing your keys, try investing in a keyless entry pad such as this simple$100 Kwikset deadbolt. It can mean the difference between spending a few hours moping in your car and enjoying a hot cup of cocoa in your living room.
Plus, you’re not the only one who benefits: If you’re expecting guests but won’t be available to greet them, they can let themselves in—a huge improvement from hiding a key, which might be a safety risk.
6. Low-flow toilet
“It may seem intimidating to those not very interested in DIY, but swapping out toilets is a fairly simple process,” Mahoney says.
Choose a high-efficiency or low-flow toilet to save money on your water bill. While it does require some investment (expect to pay between $100 and $325 for the toilet itself), you’ll be making your money back soon enough—especially if you’re replacing an older model installed before 1992. That’s when federal plumbing standards mandated all toilets use 1.6 gallons or less per flush.
With a high-efficiency model, you’ll use about 300 fewer gallons of water per year—if not much more.
7. Fresh mulch
Jazzing up the outside of your home can go a long way toward making you love where you live. While you could go all-out—landscaping the yard and painting the trim—there’s a simpler solution: mulch.
“New mulch in the flower beds can add a lot to the curb appeal,” Mahoney says.
Instead of grimy old dirt that’s been trod on for years, a fresh new layer looks clean, fresh, and pretty—making a huge difference for just $6.
Homeowners today have a mind-boggling variety of color choices for their home, and the options just keep getting more and more colorful. Last week alone, “global color authority” Pantone, a company that develops and markets color solutions for corporations, introduced 210 new shades, bringing the total number in its portfolio to 2,310. The expanded selection includes several new tones of orange, blue, and pink—which, according to hue mavens, are the colors that will be trending most in coming months.
But let’s take a step back. The undisputed, all-time favorite color of interior house paint remains white—and the runners-up are shades of not-quite white.
“The top-selling colors are always going to be the neutrals: taupes, driftwood grays, and all variations of white,” says Erika Woelfel, Behr Paints’ vice president of color marketing. “There are also certain colors that people use as a kind of standard—certain red colors for the kitchen and historical, classic colors like stone blues.”
Sue Kim, color strategist at the paint supplier Valspar, agrees, but notes that the definition of “classic” has expanded.
“The tried-and-true beige colors are still popular, but homeowners are ready to make the transition to different but still versatile grays, especially with warm undertones,” Kim says.
Outside the more neutral palette, though, color preferences tend to come in three- to five-year cycles—influenced by fashion trends, the economy, and technology. In the 1920s, thanks to the influence of art deco and Coco Chanel, lacquered black, mauve, stainless steel, and dusty turquoise were all the rage. The Great Depression of the ’30s brought in pearly, light colors such as barely-there yellow and baby blue. In the 1940s, the wartime effort—and wartime shortages—meant that olives, khakis, and drab neutrals trumped brighter colors. A similar trend happened, Woelfel notes, in the years right after 9/11.
Right now, the range of popular colors includes warmer grays, golden yellows, hot pink, and indigo and baby blue.
“We’re seeing things happen with gray, where it’s becoming warmer, almost a bridge color between gray and brown,” Woelfel says.
Purple, blue-green, and turquoise are trending down, Woelfel adds, but the time may have come for long-overlooked orange. “It has a huge range, particularly as an accent color.”
Even with the flurry of new or refashioned shades, many homeowners are reluctant to incorporate bold colors into their homes, Kim says.
“The strong colors are always put to the side because of what we see as color anxiety,” she says. “But there are more bold shades that are easy to bring into the home—a denim-inspired color, say, or a rich copper can better bring out the details of a home.”
So what’s up next? Look to the more distant past—in addition to the shorter cycles of popularity, there are also 20-year cycles fueled by nostalgia. Just as there’s been a recent embrace of all things from the ’90s on television, in house painting, colors popular from 1990 to 1995 are on the rise.
“We’ve been seeing silver tones like chrome and stainless steel for years,” Woelfel says. “Now we’re seeing brushed golds.”
If the cycle holds true, look for the bright gel colors of the early 2000s to start gaining steam soon. Or you could always go with eggshell. That never goes out of style.
Ah, to be a first-time home buyer again: How easy it was to buy a home when you weren’t carrying another mortgage on your back!
If you’re looking to graduate from first-timer to repeat buyer, you know things are about to get much trickier. Unless you’re a bona fide house collector, you’ll have to sell your home in order to buy anew—adding a whole separate layer of anxiety to what you already know is a stressful home-buying process.
In an ideal world, you’d buy a new home, move, and then, and when all the dust settles, deal with the turmoil of selling. But for most people, that’s totally unrealistic. Not only does it cost significantly more, since you’ll be paying two mortgages, but sellers might be quick to judge if you’re holding on to your current home.
DrewSnyder, a Realtor® with Snyder Sutton Real Estate inTopanga, CA, says one of his clients had difficulty getting sellers to “take them seriously unless the house was on the market or in escrow. As soon as we put it on [the market], they were considered as serious buyers.”
You can do this! If selling and buying simultaneously is the only way to go, here’s what you need to know to make sure both processes go as smoothly as possible.
Know the market first
Before you start seriously searching for a new home—or put your current home on the market—make sure you have a solid understanding of the housing market in your area (and the area where you’re planning to buy). Is the market weighted toward buyers or sellers?
Only then will you be able to fully strategize. As is so often the case, the best plan of action may differ depending on exactly who has the power.
That doesn’t mean to find one house you like and call it a day: Find multiple suitable options. That way, you’re less likely to find yourself in trouble if your purchase falls through—your newly sold home won’t leave you stranded.
Similarly, make sure to hire an appraiser and price your old home fairly. Now is decidedly not the time for delusions of grandeur: Two extra months on the market because you couldn’t humble yourself to lower the price means two months you’ll be paying double mortgages. Two very long months…
Plan your schedule carefully…
Should you buy first, then sell—or vice versa? Both have their risks and rewards. Selling first makes getting a mortgage easier, but it also means you’ll need to find a temporary place to live. Buying first means moving will be easier, but it also skews your debt-to-income ratio, making it harder to qualify for a new mortgage—not to mention the difficulty of juggling two monthly house payments.
“It’s walking a tightrope,” says Gary DiMauro, a Realtor in New York’s Hudson Valley. And he’s not just talking about scheduling: Your finances will be on the highwire, too. When determining whether you should sell or buy first, think beyond “How can I make the move as easy as possible?” Instead ask: “Can I handle two mortgages? What if my home sells for less than its listing?”
Whichever option you choose, make sure you’re prepared to accept the consequences: having to store your stuff and rent temporarily, or undergoing the financial burdens of dual mortgages.
… but don’t rely on timing
When buying and selling a home simultaneously, “there are so many external circumstances,” says DiMauro. “I’ve yet to see it really work smoothly and efficiently.”
Remember: You’re not the only party in this equation. For every seller there’s a buyer, for every buyer a seller. While things might appear to be working smoothly when viewing your master plan from above, that doesn’t take into account the variabilities of other people. Closings are rife with delays. Your buyers might have difficulty securing their mortgage; your home inspector may bring up issues that need to be fixed before you can move in.
“You’re relying on the seller of the place that you’re buying to be ready to move in concert with the buyer of your house,” DiMauro says.
So even if you’ve planned to sell your home first and are prepared to rent while buying, know that even the best-laid plans go awry—and you might end up juggling both mortgages. Preparing yourself for this (however remote) possibility ahead of time will ensure a smooth transition.
Know your financial solutions
For those who choose to sell first, the process is relatively straightforward other than the additional cost of a rental between homes. However, there is the option of a rent-back agreement, where you negotiate with the lenders and buyers to be able to remain in the property for a maximum of 60 to 90 days—often in exchange for a lower selling price or rent paid to the buyers. This can relieve some of the pressure of finding a new home, giving you additional time to house hunt.
But if you’re buying first, talk to your Realtor about ways to decrease your financial burden and risk. Here are the two most popular options for buyers:
Contract contingency: Buyers can request that their new home purchase be dependent on the successful sale of their old home. If you’re looking in a competitive market, this may not be a good option; however, if the seller of your intended home has had difficulty attracting interest, this may be a good deal for all parties involved—assuming you can convince them that your home will sell quickly.
Bridge loans: Bridge financing allows you to own two homes simultaneously if you don’t have deep pockets for a second down payment. This option is especially attractive if you’d planned to sell your home first and use the proceeds to buy the second. It functions as a short-term loan, intended to be repaid upon the sale of your original house.
Don’t let fear rush you
If your home has sold but you haven’t found a new place to live, don’t let anxiety push you toward a bad decision. DiMauro usually recommends that his clients pre-emptively plan on a short-term rental “so they don’t feel stressed or pushed into something that they would not normally be interested in,” he says. “They shouldn’t make a purchase because they felt like they were pressured from the time constraints.”
Found the perfect home right on schedule? That’s great. But don’t feel like you have to compromise on things that are important to you just because you need to find a home. Conversely, don’t accept a bid that you feel is too low just because your finances are strained by two mortgages. If you have a temporary apartment set up, you’re less likely to compromise.
Certainly, selling and buying a house simultaneously will be stressful—but carefully considering and planning for the risks and hurdles can mitigate the stress.
Let’s face it: Moving companies can be lifesavers. They’ll carry everything you own, they can handle three flights of stairs, they don’t flinch at bad weather, and they’ll move you any distance. Hey, is there anything they won’t do?
Well, yes, actually. Movers draw the line on certain things, and if you don’t know about it ahead of time you might end up out of luck on moving day. So here’s a handy no-go list.
OK, it may not come as a surprise, but “federal law bans moving companies from transporting hazardous materials,” says Lindsey Schaibly, operations coordinator of Two Men and a Truck, a franchised moving company based in Lansing, MI. This is probably a good thing.
That list includes the obvious things like propane tanks, gasoline tanks, and ammunition, but it also includes some things you might not expect.
While a few moving companies might be willing to toss a plant or two on the back of the truck for a short move, most won’t allow any on local moves. And that goes double for intrastate and cross-continental moves. You may just have to bite the bullet and transport your cherished domestic vegetation yourself.
“Some states are really sensitive about plants,” Sullivan says. “Officials are afraid of bringing in bugs or other problems into the state.”
Food and pantry items
When it comes to all that stuff clogging up your pantry, there’s a simple rule: Nonperishable foodstuff can be transported but perishable items are a strict no, Schaibly says.
Keep in mind that anything open is considered perishable, no matter what the expiration date is. So it’s better to play it safe and pack only sealed food with a long shelf life—like canned vegetables, boxed cereals, and jarred spices.
Lawn and pool equipment can quickly become a source of stress on moving day.
Generally, any pool paraphernalia that could pose a danger—such as acid or other treatment chemicals—will have to be disposed of. Same goes for weed killer and other pesticides. However, you can move the actual equipment—such as your lawn mower or generator—as long as you plan ahead.
“We ask customers to remove as much gasoline from engines as possible before we can move the item,” Sullivan says (rather sensibly).
Rickety or scary stairs
Once you’re packed, there are still a few potential snags to watch for. Most moving companies will do anything they can to move you, but everyone has limits.
“Each mover is probably a little different,” Sullivan says. “But we do everything we can to get a customer moved in, even if we have to hoist furniture over the balcony.”
But don’t expect that to be the norm. Many moving companies won’t risk rickety stairs, tight spiral staircases, or narrow balcony walkways. Trust us, we know this from experience! If you know your new place might pose a problem, tell the movers about it ahead of time.
Remember: Companies can simply decline to move you, even if you’re scheduled to move that day. It’s better to play it safe and be honest about any potential problems beforehand than to be stuck without a mover on moving day. Come clean: You’ll thank us later.
Your garbage might pile up faster than you think. In 2013, Americans created 254 million tons of waste, an average of 4.4 pounds per personevery day, according to theU.S. Environmental Protection Agency. While some of that refuse—1.51 pounds per person, per day—is recycled, the majority ends up in landfills, adding to an ever-growing ecological nightmare.
But there is an alternative: upcycling. It’s easy! It’s good for the environment! And it’s fun. Really.
OK, hear us out on this one: Converting your used or unwanted junk into newer and infinitely more awesome stuff is a truly rewarding way to spend a weekend. And you don’t even have to be all that crafty to pull it off!
What you can upcycle
A broken vase, a carton of past-their-prime eggs, and even a stack ofway-past-their-prime CDs from the ’90s can be repurposed into gorgeous and functional home décor.
Take those eggs, please (we’re here all week, folks!). The cleaned, empty eggshells can be turned into miniature planters for succulents, a project we found in “Make Garbage Great,” byTom SzakyandAlbe Zakesof the recycling companyTerraCycle. And those deeply unwantedLimp BizkitCDs can be used to supply some colorful pop to a room divider. More? You can even make orange peels into candles, a bicycle inner tube into a wallet, and a plastic bottle (and spoons) into a bird feeder.
DIY projects, clockwise from top left: Fork place-card holder, leftover-glass candlesticks, wine-cork board, eggshell planters
Our favorite projects
Some of our favorite DIY trash projects from “Make Garbage Great” are modern takes on furniture and home décor items that look remarkably similar to pricier pieces we’ve seen in places such as Restoration Hardware and West Elm.
“My favorite is the pallet table,” says Zakes. That’s a side table made out of a wooden shipping pallet. “Pallets are really easy to get your hands on, and you can make these cool tables yourself for next to nothing.”
Zakes’ wife, who isn’t quite the environmentalist he is, loves the fork place-card holder, a project that turns unwanted silverware into kitschy table décor.
Us? We love the simplicity and beauty of the glass candlestick. The project takes bits of broken or unwanted glass items to create a modern-looking, shabby-chic candlestick with very few tools or know-how required.
Keep on dumpster diving
If you find a project you love but don’t have the materials to make it, don’t let that stop you. Zakes recommends looking beyond your own garbage bin to what you can collect from friends, neighbors, co-workers, or even nearby businesses.
“A lot of times you see a project you want to do, like making a room-dividing screen from old CDs, and you wonder, ‘Where am I going to get 100 CDs from?’ But if you think a little bit outside of the box, all of these things are pretty accessible. You could go to a flea market and pick up a crate of unwanted CDs, or even send out an email at the office,” Zakes says.
Upcycling can be educational, too.
“You can learn a lot about the history of mankind by looking at garbage over the years,” Zakes says.
Let’s start with the (blatantly) obvious: Getting a mortgage and buying a house involves a lot of money. And the answers you give on your mortgage application have a direct impact on how much money you’ll get approved for—or whether you’ll be able to get the loan in the first place. So it’s not surprising that some people may be tempted to fudge the facts just a bit.
After all, it’s just paperwork, and a little white lie. What can it hurt?
A lot, actually. In fact, it can make the process downright excruciating.
To begin with, the phrase “little white lies” is a bit of a misnomer as far as mortgage applications are concerned. If you’re fudging the facts in a way that affects your costs or ability to get the loan, that small untruth is likely to turn into a whopper. And since lenders verify most of the key information on your application, your chances of getting away with it aren’t very good to begin with.
What are the possible consequences? Getting turned down for the mortgage is the least of them. If your falsehood is discovered after you get the loan, your lender could boost your interest rate or even demand immediate repayment in full. Tax-related falsehoods could get you in trouble with the IRS.
In addition, penalties for mortgage fraud—which is what lying on a mortgage application is—range as high as 30 years in prison and a $1 million fine. You likely won’t face a penalty like that for a small exaggeration or omission, but you could still end up with a fine and a conviction.
This is one of the most common. A person applies for a mortgage to buy a home as their primary residence when they actually plan to rent it out as an investment property. The benefit is that lenders charge higher interest rates on loans to buy investment properties than they do for a primary residence.
The borrower might think, “What difference does it make? A loan is a loan. I’m responsible for it either way.” But lenders know that default rates are higher on investment properties than they are on primary residences—people try harder to keep up the payments when their own homes are on the line—and that’s why they get lower rates than investors do. Minimum down payments are significantly larger on an investment property as well.
From the lender’s perspective, you’re stealing money from them by making them take on more risk than they agreed to. And risk costs money.
And don’t assume your lender won’t find out. There are several red flags that can tip them off. Buying a home in a neighborhood that doesn’t fit your socioeconomic profile is one. Another would be if your mortgage statements are being sent to a different address than your new “primary residence.” Either might cause your lender to send someone to investigate.
2. How much money you make
It’s really hard to exaggerate your income on a mortgage application. For one thing, your lender is going to verify all of the financial information you provide on your application, so if your tax returns, bank statements, W-2 forms, and the like don’t support your income claims, you won’t get the loan.
The tax return is the big one. Your lender is going to request copies of your two most recent ones, and will obtain them directly from the IRS—you can’t simply alter your own copies and try to submit them. If you do, your lender is going to wonder why your copy and the one from the IRS don’t match.
People who are self-employed sometimes feel they have a bit more room to fudge things, since they’re reporting their own income. But again, your tax return is going to tell the tale. You might exaggerate your earnings on the profit-and-loss statements from your business, but unless those also match up with your tax returns, you’re going to have a hard time getting your lender to buy those figures.
3. The origin of your down payment funds
Here’s one that many borrowers think is harmless: You’re short of cash for a down payment, so you ask a family member to front you the necessary funds, and pay them back later. What’s the harm in that?
The problem is that when you apply for a mortgage, you need to disclose all your other debt obligations on the application—and that loan from a family member is one of them. It represents part of your financial burdens that will compete with your mortgage payments for your financial resources. So your lender will want to know about it.
If you receive down payment assistance from a relative or anyone else, most of the time your lender will want you to provide a letter from them stating that the funds are a gift and do not need to be repaid.
4. Undisclosed incentives/rebates
In some real estate transactions, borrowers and lenders are tempted to “sweeten the pot” by making a side deal apart from the declared sale price of the home itself. Often, this is in the form of a rebate or kickback from the seller to the buyer when the asking price is greater than the buyer is willing to pay.
The seller may offer to cover the buyer’s closing costs above and beyond what is normal and declared. In some cases, the seller may even cover the buyer’s down payment. Such arrangements may be allowed in some situations, but what makes them fraudulent is when the lender is out of the loop—when they’re done separately from the official sales transaction and without the lender’s knowledge.
The harm here is that the lender is being tricked into financing more than the actual sale price of the home—so the lender is taking on more risk than expected and would have a harder time recovering the money in the event of a default.
5. A bogus co-borrower
In some cases, a borrower who doesn’t earn enough to qualify for the desired mortgage may seek to enlist a bogus co-borrower. The co-borrower, often a relative, falsely states that he or she plans to occupy the residence and contribute toward paying the mortgage, and so his or her income is counted toward qualifying for the mortgage.
The party who really gets hurt with this one are the co-borrowers. Even if they aren’t actually contributing toward the mortgage, it’s listed as an obligation on their credit report. So if they later decide to buy their own home or take out some other large loan, it’s going to hurt their debt-to-income ratio.
In addition, they could get stuck with the loan itself if you’re unable to keep up with the payments, since they also signed off on the loan. Not only that, but any payments you might miss will damage their credit as well, since both of you are equally responsible for the mortgage.
6. Your employment status
People will sometimes be tempted to stretch the truth a bit when it comes to reporting their employment on a mortgage application. For example, claiming you’ve been working for a company for three years when you’ve been there for only one—because lenders want to see at least two years of steady employment before approving a mortgage (changing jobs in the same field is OK).
In other cases, they may claim to own a nonexistent small business or get a friend to pose as an employer for whom they work at least part time. But neither of these will help unless your tax returns support the income you claim.
7. Hidden liabilities
One of the keys to getting approved for a mortgage is your debt-to-income ratio. That is, how much of your earnings you have to pay out each month to cover all your debt payments. So some borrowers will omit listing certain debts on their mortgage application to try to make it look like they owe less than they do.
This rarely works. For one thing, just about all established creditors—banks, credit card companies, auto lenders, medical services, etc.—are going to report your debt and payment history to the credit-reporting agencies. Your lender is going to pull your credit history when you apply for a mortgage, so it’s going to find out about it.
Similarly, some borrowers may try to game the system by taking out a large loan just before the mortgage closes—perhaps by using a cash advance on a credit card—and hope it doesn’t show up in the credit-reporting system before the mortgage is closed.
However, when you sign off on a mortgage, one of the things you sign is a statement that the information you’ve provided is accurate to the best of your knowledge. If you took out a big loan the day before, the information on your application is no longer accurate—and that’s mortgage fraud.
Around here, I’ve developed a bit of a reputation. As “Rachel the Renter” I entertain my co-workers (and you!) with a variety of renting anecdotes and horror stories. But the truth is, I do want to eventually break up with my landlord and explore a monogamous relationship with a mortgage broker. I know “Rachel the First-Time Homeowner” doesn’t have the same alliterative ring, but I’m sure we’ll all survive.
Thing is, there’s lots more at stake than just a change in status from renter to homeowner. Like so many (if not all!) first-time home buyers, I have no earthly idea what I’m doing. Sure, I can read up on all the buying and finance advice we offer here at realtor.com®. Of course, I can consult with my real estate agent and my mortgage broker. But if there’s one thing I keep hearing from those who’ve forged the path ahead of me, it’s that when you buy a home for the first time, you’re constantly faced with things you didn’t know you didn’t know.So, before I embark, I thought I’d minimize some of those surprises and take advantage of my home-owning co-workers’ experience. They shared these personal anecdotes of surprises they encountered on the road to homeownership. I hope this will help prepare you—and me—for what lies ahead:
“I thought our mortgage loan was approved and ready to go, but at the last minute the originating bank balked at the purchase price of our home—they thought it was too high. This was in 2008 in Silicon Valley—we thought we were getting a bargain! The bank was based somewhere in the Midwest, though. They assigned an assessor to come check it out, but fortunately the assessment supported our purchase price. It was a suspenseful few days, though.” —Cicely Wedgeworth, senior editor.
Takeaway: Don’t count on your mortgage until it’s signed. And make sure you double-check your property assessment.
Count your costs
Keep track of your mounting costs
“I might have experienced short-term memory loss during my loan approval process. All the closing costs were a mystery to me, and my loan officer or Realtor had to explain each expense every single time I saw them in updated loan docs.” —Oie Lian Yeh, copy editor
Takeaway: Go over the closing costs with your real estate agent and take notes on what to expect. You’ll see these costs itemized again and again, so best to get familiar fast.
Budget time and money for repairs
Repairs will cost you time and money
“I was surprised and worried about the problems that the home inspector found. How serious are termites? How about mold? Can these things be fixed and will the house be safe? Or will we regret buying a house with possible structural and health-related issues?
“And how much money will it cost for us to do roof repairs ourselves when the seller is selling “as-is” and it’s a competitive market where we lost out on two previous houses we bid on? Related question: How long could we put off doing roof repairs, since we were raiding our savings to fund the down payment for the house?” –Kim Moy, managing editor
Takeaway: You can’t foresee problems that might arise during the inspection. You might be able to negotiate with the sellers, but you’ll want to have enough money left over after closing for any unexpected repairs. Be prepared to walk away from your dream home if needed.
Multiple visits are OK!
Don’t be shy about visiting and revisiting the house
“When we were buying our first house, I didn’t know I could go back to look at the house again before we placed a bid. I was also shocked that I was able to meet the sellers, which ultimately put our bid over the edge and got us the house.
“We saw the house on a Saturday and bids were due on Monday. The open house was full of potential buyers and I felt like I hadn’t spent enough time really seeingthe entire house. Our agent arranged for us to go see the house one more time on Sunday afternoon. I assumed the house would be empty, but the sellers were home and welcomed us in to take another look around.
“They were so friendly and walked us through the house, explaining little nuances along the way. We submitted our bid the next day and found out the house was ours a few days later. Our agent told us there were seven bids and ours was the same price as another couple’s, but because the sellers met and remembered me, our bid won. I firmly believe it was meant to be, but I’m glad I went back for another peek.”—Erik Gunther, senior editor
Takeaway: Look as many times as you need. This is the place you’ll call home, after all. Even in a competitive market, a second look could end up giving you the edge. (And while you certainly don’t want to harass the seller, don’t be afraid to personalize your offer with a letter describing any details about you, your family, and why you love their home. It could be enough to sway the seller in your favor.)
Learn (and love) thy neighbors
Neighbors can make or break your living situation
“Maybe this is a very urban issue, but I didn’t realize how neighbors can make—or break—a home. When my wife and I moved to our small co-op in Brooklyn, we knew we could get along with the three families living on the floors below us, but over the years they’ve become more than just neighbors. They’re good friends: We all had children together at about the same time, so our kids have grown up together, we babysit for one another, and we regularly get together for barbecues in our common space.
It’s what people always say about “community”—you really do want to be in a place that not only welcomes but embraces you, that you look forward to being a part of. Maybe I was just a cynical New Yorker before my wife and I bought this place, dismissive of the idea of community in a city where people cherish their anonymity, but once it happens, you realize how good it is. If I’m ever foolish enough to move away from here, I’ll definitely consider my potential neighbors on equal (or greater!) footing with the bathroom fixtures and the price per square foot.” —Matt Gross, former editorial director
Takeaway: Your community is often as important as the home you’re living in. Take a good look at the neighborhood, and don’t be afraid to ask the neighbors questions. These people could become your babysitters, your carpool buddies, and your closest friends over the years.