Paying less than 20 percent on a down payment on a house will likely require buying private mortgage insurance by the lender.
The insurance, called PMI for short, is used to reimburse the bank if you default on the loan.
It isn’t too expensive—usually between 0.5 and 1 percent of the entire loan amount paid annually. On a $100,000 loan, a 1 percent PMI fee equals $1,000 a year, or $83.33 per month. That may not be enough money to make or break a home purchase, but it’s money that homeowners would rather be saving or spending elsewhere.
There are a few ways to avoid PMI, with the simplest being to have a down payment of 20 percent or more. You can put off buying a home until you can come up with that much money, though that’s probably not the answer you’re looking for.
Another solution is once you’ve bought a house, you can cancel PMI once the loan’s principal balance drops to 80 percent of the home’s original appraised value or its current market value. By paying more of the principal each month, for example, you can have 20 percent equity in the home quicker and then cancel PMI.
Your lender may automatically cancel PMI when your mortgage balance is 80 percent. By law it must tell you at closing how long it will take with your monthly mortgage payments to cancel PMI.
You may be able to reach that 80 percent threshold by having your home reappraised if you think it has gone up in value from the original sales price or appraised value.
Another option is a piggyback mortgage. This is a second mortgage or home equity loan that is taken out with a first mortgage. For example, an “80-10-10” piggyback mortgage covers the purchase price with 80 percent from the first mortgage, 10 percent from your down payment, and 10 percent from the second loan, also called a piggyback loan.
This allows you to have a low down payment of 10 percent, but not have a loan-to-value balance of 90 percent that would require PMI. Instead, the two loans lower the LTV and don’t require PMI.
Finally, there’s the option of lender-paid mortgage insurance, or LMPI. It includes the cost of PMI in a higher mortgage interest rate, meaning you’d pay more in interest over the life of the loan.
There are myriad advantages to adding houseplants to your home. For starters, many different types can help to purify the air and provide a healthier living space. Visual appeal is an added bonus that can make any room feel livelier by bringing the outdoors inside.
Here are a few popular houseplants that are easy to maintain and will add a creative design element.
Ficus Audrey (ficus benghalensis)
A natural statement piece with its large, velvety leaves, the ficus Audrey is having a moment among houseplant enthusiasts. If you want a plant that requires minimal care and a minimalist look, this is the one for you.
Chinese Evergreen (aglaonema modestum)
Named among the top air-filtering houseplants by NASA, the Chinese evergreen is visually stunning with its pink and green leaves. Even if you don’t have the greenest of thumbs, they’re quite resilient and can survive with indirect sunlight.
Rattlesnake Plant (calathea lancifolia)
If you enjoy bold patterns and vibrant colors, the rattlesnake plant will make the perfect addition to your home with its bright green and purple leaves. They’re low maintenance, don’t require direct sunlight, and will freshen up any room with a tropical feel.
Bunny Ear Cactus (opuntia microdasys)
Native to northern Mexico, the bunny ear cactus adds instant visual drama. Named for the two pads that are shaped like rabbit ears, it will sprout flowers in the summertime and is incredibly easy to keep alive as long as your home is not too humid. Whether you have a modern or minimalist look, cacti are an easy way to spruce up your home’s design.
Fiddle Leaf Fig (ficus lyrata)
There’s no denying the fiddle leaf fig is among the trendiest of houseplants and it’s easy to see why. Those lush leaves add a bit of flair to your home’s aesthetic and it’s the ideal size to fill unused space without feeling overbearing. Plus, these stylish trees improve the air quality, so you can breathe easy.
Is a Second Mortgage a Good Idea?
If you need money for home improvements, tuition or another purpose, you might be able to secure funds through a second mortgage.
How Does a Second Mortgage Work?
A second mortgage is a loan that allows a homeowner to borrow against the value of their house by using it as collateral.
One option is to receive a lump sum of money to be repaid over a period of time. Another is to open a home equity line of credit.
Before getting a second mortgage, be sure to weigh the decision carefully.
Falling behind on your payments could put you at risk of foreclosure.
A second mortgage should only be used for a legitimate purpose that will benefit you in the long run.
More and more homeowners are embracing green living. That can mean making substantial changes within the home, but the good news is that using environmentally friendly materials doesn’t require compromising your design aesthetic. In fact, there are plenty of stylish and sustainable options for the whole house.
If you’re remodeling your kitchen or bathrooms in the near future, consider these materials for eco-chic countertops that are sure to impress any potential buyers:
ECO by Cosentino
Cosentino is world-renowned for producing high-end surfaces, and the company’s ECO line is no exception. As stunning as it is impressive, ECO is made from 75 percent recycled materials, such as glass, porcelain and earthenware. The result is a low-maintenance surface that reduces landfill waste and saves natural resources.
Butcher block is both timeless and practical. When you use FSC-certified wood, it’s also an eco-friendly surface. The Forest Stewardship Council ensures that forests around the world are managed responsibly while guaranteeing that the wood has been sourced in a manner that’s environmentally and socially responsible.
Durat countertops are stylish and durable, but, best of all, this surface is made from post-industrial plastic waste that would otherwise end up in a landfill. A sleek kitchen that reduces the burden on the environment is a win-win that you can feel good about with every meal you prepare.
Made from 100-percent recycled paper, RichLite is an ideal material for kitchen countertops, and pretty much anything at all (it’s even used for exterior cladding). The composite material is available in a wide variety of colors and could easily pass for a stone surface, giving your kitchen a breathtaking look that’s also sustainable.
IceStone has been a leading surface for eco-friendly consumers for over a decade. Its terrazzo-like appearance is due to the fact that the material is made from recycled glass, Portland cement and non-toxic pigments. While it comes in an assortment of exciting colors, the one knock against IceStone is that it’s somewhat porous and should be resealed annually.
In all likelihood, your home is the biggest investment you’ll make in your life. To protect that investment, you should perform regular maintenance to ensure your home runs efficiently for years to come. Although most homeowners already know the importance of maintenance and tackle the most obvious jobs, you may be surprised to learn there are a few tasks you probably overlook.
Clean Your Refrigerator Drip Pan
Did you know that most refrigerators have drip pans? The pans need to be cleaned regularly; otherwise, they can be prone to mold growth. Pull the pan out carefully to prevent spills, dump excess liquid and clean the pan with an all-purpose cleaner.
Flush Your Water Heater
Check the temperature of your water heater to ensure it’s set below 120 degrees Fahrenheit to prevent scalding. Test its safety relief valve once a year so that it operates properly, and flush the system to remove sediment buildup, which can cause system failure.
Reseal Your Grout
Grout needs to be resealed annually to protect your tile from wear and tear. Most grout is made of sand and cement; this means it can absorb water, bacteria and even stains. Resealing will help your grout look better and last as long as possible.
Test Smoke Alarms
Testing smoke alarms and changing their batteries is a vital maintenance task for safety reasons. Smoke alarms should be tested twice a year. Remember, at minimum, you should have one detector on every level of your home, and in each bedroom.
Change Your HVAC Filters
Have your heating system inspected, serviced and cleaned annually. Proper maintenance can extend the life of your furnace, postponing an expensive replacement. Change air filters seasonally to monthly, depending on your home’s needs, to protect against major HVAC issues.
Block Out Pests
Prevent pests from setting up camp in your home by caulking small holes or cracks inside and outside the house to deter bugs. Also, use hardware cloth to cover any larger areas.
Mastering home maintenance tasks can be a chore, but by ensuring you’re not missing these all-too-often-ignored jobs, you’ll be able to rest easy knowing your home is that much more protected.
Source: Brentnie Daggett/RISMedia’s Housecall
4 Family-Friendly Games That Add Style to Your Backyard
Here are a few beloved lawn games the whole family can enjoy!
Though commonly played on the lawn, bocce is traditionally played on a court that can give an elegant look to any yard.
A manicured lawn set up with croquet wickets might look formal, but in reality, it’s a laid-back game for the whole family.
Having surged in popularity in recent years, homeowners who have the space are putting shuffleboard courts in their backyards.
A great activity for the family to enjoy together, badminton is easy to put away when not in use.
Decades agoâpre-1980âa great deal of the paint that was utilized in homes contained lead. Over the ensuing years, that paint would chip or crumble and the resulting dust could cause serious health problems, especially for children and pregnant women.
Using lead paint was the norm. It was used both inside and outside, particularly on windows, baseboards, trim and doors. Unfortunately, layers of lead-based paint have been disturbed through the years during remodeling or home repair.
The Environmental Protection Agency issued a devastating report revealing that lead can affect childrenâs brains and developing nervous systems, resulting in reduced intelligence, learning disabilities and behavioral problems. In 2019, itâs absolutely necessary for anyone selling a home to be aware of the dangers of lead paint and know if their house will be a problem.
And it impacts a lot of homes. The Department of Health revealed that approximately 75 percent of all homes built 40 years or more ago contain some lead-based paint. Furthermore, itâs estimated that more than 30 million homes in the U.S. still contain lead paint.
Unlike in the past, real estate professionals and their sellers are required to disclose any presence of known lead paint and lead hazards during the sale or rental of a home.
For homeowners who are unsure about their homes, sometimes itâs easier to replace windows, doors, or woodwork than it is to remove the lead-based paint. This way, all traces of any paint will have been removed from the home.
Federal law requires that before being obligated under a contract to buy housing built prior to 1978, buyers must receive the following from the home seller:
- An EPA-approved information pamphlet on identifying and controlling lead-based paint hazards titledÂ Protect Your Family From Lead In Your Home
- Any known information concerning the presence of lead-based paint or lead-based paint hazards in the home or building.
- An attachment to the contract, or language inserted in the contract, that includes a âLead Warning Statementâ and confirms that the seller has complied with all notification requirements.
- A 10-day period to conduct a paint inspection or risk assessment for lead-based paint or lead-based paint hazards.
If you have an older home and you can say for certain that there is no lead paint, it can also attract a higher price.
Between the craziness of work, social events and family, itâs difficult to find the time to clean the house, let alone do a deep cleaning. Although we all somehow manage to clean regularly enough to keep our homes looking and smelling fresh, many people also likely ignore some commonly overlooked problem areas.
Are you ready to channel your inner “Type A” personality to go the extra mile and give your home a deep cleaning on occasion? Start with the following tips:
Clean the baseboards.Â At least once a year, really get down on your hands and knees with a rag and a toothbrush to remove dust and grime from your baseboards. This type of detailing has a huge impact in the overall sparkle of your space.
Wipe down the ceiling fan.Â Sure, you vacuum your floor and dust your shelves, but how often do you stop to look up? Ceiling fans collect a large amount of dust and debris and should be cleaned at least twice a yearâor seasonally, if you can manage.
Clean out the cupboards.Â At least once a year, take everything out of your kitchen cupboards, wipe them down and re-organize. You might be shocked to discover how many expired or unused items are taking up precious space. You can finally throw the bad items in the trash and donate the good ones.
Tackle the freezer. Because frozen food lasts so long, you might forget whatâs even stuffed inside your freezer. It could be packed with freezer-burned food or leftovers you never revisited. Remove everything from the freezer, toss out anything you no longer need or want, and wipe the interior down. This should be done at least twice a year.
Beat out the dust. Couch cushions, throw pillows, drapes and rugs collect dust over time. On a sunny day at least once a year, take them outside and give them a good beatdown to remove allergens. Just make sure to turn your head away and avoid breathing in the dust particles.
What You Need to Know About Indoor Vertical Gardens
Hereâs what you need to know before designing your indoor vertical garden…
Indoor living walls require a series of pockets to hold the plants, as well as drip irrigation systems.
Pick Your Plants
Sunlight will determine the plants best suited to your vertical garden. Golden pothos and crotons do well in bright, indirect light…
…While ferns can grow quickly in shady places.Â
Sit Back and Enjoy the Benefits
A living wall will improve your homeâs air quality, remove pollutants for a healthier atmosphere and reduce stress.
Pests, carbon monoxide and moldâoh my! These hazards can be hiding in a home and, if left unchecked, could cause serious health issues or become costly. Thankfully, these and many other issues are easily manageable. If you want to ensure your home isnât at risk, HomeAdvisor suggests starting with these six possible household problems:
1. Unknown Termite Problem.Â Termites can do serious damage to your home each year without many warning signs. While detecting evidence of termites can be difficult, addressing the issue is simple. Many pest control specialists will offer a personalized solution and provide information about preventing termite damage. If you live in an area thatâs prone to termites or you suspect your home has termite damage, consult a professional.
2. Environmental Threats.Â Unknown to many homeowners, general home inspections might not check for some safety factors. Unless you specifically include an item for examination, many inspectors will not check for asbestos, radon gas, lead paint, toxic mold or pests. If left unmitigated, these contaminants could cause serious damage to your home and health. Call a specialist immediately if you suspect your home is at risk. In addition to inspecting your home for toxic contaminants, a specialist will identify the best course of action to remove offending hazards.
3. Leaky Plumbing.Â On average, plumbing leaks account for 10,000 gallons of wasted water each year, enough to fill a swimming pool. In fact, if your toilet is constantly running, you could be wasting 200 or more gallons of water each dayâthatâs 73,000 gallons of water every year. Plumbing leaks can significantly add to your water bill. However, fixing them is as easy as taking a trip to the hardware store or hiring a plumber.
4. Inefficient Water Heater.Â Replace your water heater if it doesnât heat efficiently or requires constant repair. The average replacement cost is estimated at under $1,000. In addition to reduced energy efficiency, faulty water heaters can also pose a safety threat. Damaged heaters can explode, causing severe damage to your home and potential injury to household members. Consider having a pro inspect your water heater for signs of failure.
5. Carbon Monoxide.Â Carbon monoxide is a major safety issue all homeowners should address. Fortunately, there are easy ways to protect your household, such as installing carbon monoxide detectors and ensuring the proper function of your gas-, oil- and charcoal-burning appliances.
6. Water Damage.Â Preventing water damage is simple. Begin by inspecting your gutters for clogs. Sticks and leaves can collect in your gutters and cause water to pool near your home. Standing water will seep into the soil and damage your homeâs foundation and basement. Next, look for leaky pipes and faulty connections. Slow drips can cause mold and mildew growth over time. Constant moisture will also damage your flooring, subflooring and ceiling if the leak is in your second story. If you discover mold or water damage, call a specialist to protect your home and family.
If you need money for home improvements, college tuition or another purpose, you might be able to secure funds with favorable terms through a second mortgage. Before you do so, it’s important to make sure you understand the terms and potential risks.
How Does a Second Mortgage Work?
A second mortgage is a loan that allows a homeowner to borrow against the value of their house by using it as collateral. A second mortgage draws upon the equity that has been accumulated. Equity can grow when mortgage payments lower the loan balance and/or when the value of the house increases due to renovations or a change in the real estate market.
The loan that was used to buy the home initially is the first mortgage and is secured with a lien on the house. A second mortgage can be subject to a fixed or variable interest rate. A second mortgage typically has an interest rate that is lower than rates for credit cards, but a little higher than the rate for the first mortgage.
Types of Second Mortgages
One option is to receive a lump sum of money to be repaid over a period of time. A lump sum second mortgage would typically require monthly payments that consist of a portion of the loan balance and interest.
Another option is to open a home equity line of credit. You could borrow money once or several times, up to the available credit line, and gradually pay it back.
Pros and Cons of Second Mortgages
Since a second mortgage uses the house as collateral, you could probably borrow more than you would be able to through a conventional loan. The total amount that can be borrowed depends on the lender’s policies.
To obtain a second mortgage, you would need to pay for an appraisal, origination fees and a credit check, which could total thousands of dollars. Since a second mortgage uses a house as collateral, falling behind on your payments could put you at risk of foreclosure.
Reasons to Get a Second Mortgage
A second mortgage should only be used for a legitimate purpose that is likely to benefit you in the long run. For example, it would make sense to use a second mortgage to make repairs and improvements that would increase your home’s value and eventual sale price. A second mortgage could also be a good idea if you used the money to pay for a degree that could help you secure a job with a higher salary in the future. If you wanted to consolidate high-interest debts, you could obtain a lower interest rate through a second mortgage.
Is a Second Mortgage Right for You?
A second mortgage can help you meet your long-term financial goals. Before you take on a new loan using your home as collateral, be sure that you understand how it works, and make sure you can afford the monthly payments in order to avoid the risk of foreclosure.
This article is intended for informational purposes only and should not be construed as professional or legal advice.
5 Improvements That Can Increase Your Home's Value
Implement these improvements that can increase your homeâs value…
Upgrading your appliances and replacing dated countertops can transform your cooking space.
Add a fire pit or barbecue area to your patio where people can envision themselves hanging out.
Energy-efficient windows and appliances have major appeal to those looking to lower their impact on the environment.
New tiles and countertops will make the bathroom feel fresh and luxurious.Â
Increased Curb Appeal
First impressions matter. A new front porch or walkway can pay off when itâs time to sell your home.
A 30- or 15-year, fixed-rate mortgage with the same payment amounts each month is one of the most common ways to buy a home—but not everyone can qualify for a traditional mortgage, or has the money set aside for a sizable down payment so they can get a low-interest loan and have affordable payments.
Here are four non-traditional ways to be able to afford to buy a home:
1. Borrow from your parents: If you don’t mind possibly changing your relationship with your parents, ask them for a loan to help you come up with a bigger down payment so you can qualify for a loan. Hire a lawyer to write up a contract, and make sure the loan doesn’t appear as a gift, which would require a gift tax to be paid.
2. Parental co-signers: If your parents won’t loan you money, ask them to co-sign your home loan. This can improve your debt-to-income ratio, making you a better risk to the lender—but your parents should be aware that if you don’t make loan payments, they’ll be liable for them.
3. Borrow from a retirement account: If you have enough money in your 401(k) or IRA, you can borrow money from yourself if you use the money for a down payment on a house, or, you could use the retirement funds to show a lender that you have a lot of money in savings to make loan payments if you lose your job.
The downside is that if you’re 59-1/2 years old or younger and withdraw any of your retirement savings, you’ll pay a 10 percent penalty and will pay taxes on it. The money will have to be repaid within 60 days if you lose your job.
A Roth IRA is after-tax money, so withdrawing from it to buy a home means you’ll only be taxed on the earnings, not the full amount.
4. Insurance policy with cash value: Some life insurance policies allow policyholders to borrow against the principal or cash value, and the money can be used for whatever they wish, including a home purchase. The loan won’t have to be repaid—although not repaying it will leave a lower death benefit.
Whichever non-traditional strategy you use to finance a home, talk to your financial advisor and tax preparer for details on how it will affect your finances.