“Next to being shot at and missed, nothing is really quite as satisfying as an income tax refund.”

The most dreaded time of the year has come and gone and for some of us the sting and pain will be with us for a little while.  I am talking about tax day, and while some of us needed to limp off and lick our wounds, there are a few out there that will actually be getting a little money back from the clutches of the IRS.  If you are one of those few lucky ones, I applaud you and I have to wonder, what are you going to do with the money you will be getting back.  Sure it seems like found money and you can think of nothing better than to splurge and buy that new, flashy, exciting, fill in the blank item you have been eyeing for months.  I have to be honest, in previous years, I too have succumbed to this fever and believe me I have enjoyed it.  However, as I get older, the things I want to splurge on are far too expensive to be covered by the few dollars we usually got back from the government.  While a computer or a new television may have made me giddy when I was younger, now, all I can think of spending our money on are extravagant trips, pieces of artwork, or maybe a new car.  Not really the stuff that could be bought from a mere tax refund.  But, maybe there a few things that might make me take notice this year, if we were getting a refund. 

We’ve all talked about it but not many put it into practice.  We have a little extra money and instead of doing the responsible thing, we spend it as soon as we get it.  But one of the first things anyone should do with their refund is to save it.  Homes are expensive and if something goes wrong, it is nice to have a little slush fund for just that reason.  Next time the water heater breaks or the air conditioner is down, having that money in the bank to cover any repairs can save you many a headache and relieve the stress that comes with it.  Better yet, you could also take that refund and pay down any existing debt you may have.  The less you shell out each month allows you to save more in the long run because you will be paying less in interest over time.  If you have some things in your home that need to be repaired or upgraded, your tax refund may just be the ticket you need to get things done.  Not only are you taking care of any problems and maintaining your home, but you could be raising its value at the same time.  Things like basic maintenance and repairs or even upgrading the energy efficiency of your home, in the log run, will actually put even more money back into your pockets better than that shiny new fill in the blank item you just have to have.  If you have to spend your refund, you really want the most bang for your buck. 

(The blog title is a quote by F. J. Raymond, humorist)

Are Home Prices More Affordable Now?

Back to the Year 2006

Since home prices have increased so much since 2009, one question I have been hearing recently is, “Are homes more affordable now or back in 2006?”  If we allow time to take us back to the month of June 2006, we would see that the Manteca housing market peaked with the average single family home priced at $455,000.  Currently, Manteca’s average home price is $345,000 – that’s $110,000 less than 2006.  This is a large difference in price compared to now and then, but what is the difference between mortgage payments?

Don’t Forget the Interest Rate

Before the mortgage payments can be compared, we have to know what the interest rate was for an FHA loan.   In June of 2006, the interest rate for a FHA mortgage was 6.72%.  Today’s FHA rate is about 3.75%.  So, not only was the average house price in 2006, 24% higher than today, the interest rate was 56% higher.

Time to Calculate

If you compare the average mortgage and interest rate from the year 2006 with today’s averages, you will find that the average household paid a monthly mortgage of $2,838.00 per month just for the principle and interest with a FHA loan.  The same house today would only cost a homeowner $1,597.00 per month.  That is $1,241 difference!  The only way a person could afford a home in 2006 is with a variable interest rate loan that started ridiculously low, like at 1.5%, and then adjusted to the current interest rate after five years.  Let’s not go back there again.

And the Answer is…

You are in a much better situation today to buy a new home than ten years ago.  The house prices are more affordable and the interest rates are about half of what they were in 2006.  If you are thinking about looking for a new home this is a great time to take action and get a low interest rate loan.

Winter, No Wait, Spring Is Coming

Spring is in the air, almost.  We are on the last few dregs of winter and the first day of spring is just around the corner.  It is time to through back the curtains, stow away the heavy blankets and storm windows, and open up the doors.  Just like we prepare our homes for fall or winter, it is time to prepare for spring.  Not only is it time for spring cleaning, it is also the time to refresh, our homes that is.  One of the best ways to do that is to bring the outdoor inside.  There is nothing better to brighten up a room, and our moods, after the long winter than to pepper your home with live plants and fresh cut flowers.  Not only do they help to improve the air quality with in the home, they can also add that little pop of color that just adds something special to our lives.  Speaking of color, we could all have a little more of it in our lives.  Adding some new accent pieces, throw pillows, or even new window treatments to any room, can make it feel completely new.  For the more adventurous, painting an accent wall or the whole room can do wonders to change a drab and cold room to something more exciting and warm. 

For those of you, who don’t want to go overboard on the spending, there are ways you can perk up your home for spring.  Try rearranging your existing furniture or decorations.  Putting things in new places can completely change the atmosphere with in a room and can give your home a fresh new look without breaking the bank.  Move that chair from the bedroom into the living room, or highlight a piece of art that has been hanging in the back bed bedroom, by moving it into the from hall.  Just varying the position of the couch so it has a new focal point to look at can make a big difference.  Even just changing how you stack the books on your bookshelf can bring new life to a room.  Just for a kick, try arranging the books by color and you will be amazed at the results.  And last but certainly not least, the easiest way to make your house look anew is to come in with a good attitude.  The best way to do that is to brighten up your entryway to make your home an inviting place to come to.  This is the first impression people see of your home, so, spruce up that placemat, plant some eye-catching plants and flowers, and make it your own.   

It is Time to Move!

You Got the House

Most home buyers don’t realize how stressful it can be when purchasing a new home.  After relentlessly looking for a new home, you make the offer, but then, counter offers are often made by both sides. Your adrenaline is flowing, emotions are high, and after a sleepless night or two, you finally get the call from your Realtor - the last counter offer was accepted and you are in escrow!  The inspections are finished, the loan is approved, and now you think about, “How in the world am I going to move all this stuff?”  If you have been in your current house as long as I have, moving can be pretty SCARY! 

Get Picky with Packing

How are all those very important things that have accumulated over the years in the garage, the closets, the shed, and around the side yard going fit in the new house?  One rule you may want to use, and it can be emotionally painful, is if you haven’t used an item within the past two years, it doesn’t make it to the new house. You’ll be surprised at how many items haven’t been used within the past few years.  TIP: A simple way of getting rid of those unused items, and to make a little extra dough, is to have a moving sale! 

Label It or Lose It

For everything else that made the cut, make a list of what you have and determine where it will go in your new home.  While packing, write down the contents of each box on colored sticky notes and be sure to color coordinate by room. Also make sure to use tape to secure the notes on the side of each box so it doesn’t accidently come off during the move.  Once you’re in the new house, write the room name on the color coordinated sticky note and place it on the door of each room so each box makes it to the correct destination. Ask your helpers to make sure all the sticky notes are located on a visible side of each box when placed in a room.  This will really help when unpacking or trying to find something, like a plate or cup during the first evening in your new home.

In San Andreas, The Day After Tomorrow, The Impossible Twister Will Bring Armageddon

Disasters happen.  It is a part of life here on Earth.  If you believe Hollywood, we are generally all going to be in for a devastating end, unless we happen to be the unlikely hero who saves as many as we can before things really hit the fan, all in the span of about 2 hours.  Maybe what’s coming may not be as bad or as widespread as Hollywood portrays it to be, but to be honest, disasters happen.  The Impossible was based on the true story of a Tsunami hitting Southeast Asia after all. 

    So what can we do about them?  Hide our heads in the sand or be prepared.  Whether it is an unimaginable blizzard hitting the east coast, a hurricane hitting the Gulf of Mexico, a twister hitting tornado alley, the 10.0 earthquake hitting my neck of the woods in California, the flooding of your neighborhood, or just a fire in your own home, there are some universal things we can do to be prepared for the worst that mother nature can throw at us. 

No matter what the disaster, natural or otherwise, there are some universal tasks that you can do to keep you and your family safe when it occurs.  The best thing you can do is be prepared and have a plan.  Planning alleviates questions and gives you the tools you will need to solve any problems that may come up.  If people know what to do in an emergency, they are less likely to panic and this can help save lives.  Part of the plan should include designated evacuation routes and reunion spots so that you can make sure your family gets out of your home safe.  Your plan should also include backups to both as well.  To make sure everyone knows what they are supposed to do, you need to practice.  When you are not in the midst of a disaster is when you should prepare an emergency supply kit.  This kit should include things like food, water, medication, flashlights, radio, batteries, and a basic first aid kit.  Other items to consider would be pet supplies, toilet paper, soap, toothbrushes and toothpaste, as well as pillows and blankets.  Putting a kit together is half the battle, but please do remember that things can expire.  Check your kit often and replenish or replace items as needed.  This is also a great time to become familiar with basic first aid, in addition to CPR.  Look, things can happen, but if you are prepared and have a plan, it may not be as big of a disaster to you and your family.  

To Sell then Buy or To Buy then Sell?

What to Do?

Since we have had a regular real estate market for the past two years, it is becoming more common to see existing home owners looking to upgrade to a larger or smaller home, depending on their situation.  Recently, I spoke to several home owners who are considering making a move this year.  The one common question from the homeowners is, should I first sell my house or buy a house?  This is a really good question, but the answer can be complicated.

Which to Choose?

If you sell your house before buying your next home, you may find yourself under pressure to find the right property.  You may have to settle for less of a house, or worse, end up paying too much.  Attempting to purchase your next home before your current house is sold can more difficult, since most buyers are not in the situation in which they can qualify for a new loan before paying off the current mortgage.

Don’t Settle, Make a Plan!

Before making the decision to move, it is important to know your bottom line before anything is final.  It is critical to determine how much you will net from selling your current home.  In most cases, this will impact the purchase price of your next home.  At the same time, it is important to know how much it will cost to purchase your next home.  Not the purchase price, but the closing costs associated with title and escrow fees; and how much your lender will want up front for property taxes and fire insurance.  This will all impact how much you can put down on your new home, which will affect the most important item, your new monthly payment. 

Where are you Going?

Part of the process of making the decision to move is to know where your destination will be. It is essential to determine that the house that you want to buy is available.  If you are looking for a house that may not even be on the market, it will impact the decision of selling before buying your next home.