Contingent Offers Are Useful for Buyers, but Will They Turn Off Sellers?

Contingent offers can be a challenge for home buyers because they are in the process of selling one home while purchasing another.

When homeowners decide it’s time to move to another house, they face the quandary of deciding whether to wait until their old place sells before looking for a new home. Waiting generally makes it more financially feasible to purchase a new home, but you risk having to rush around to find a suitable place to live once your old home sells. And it’s not always possible to wait—sometimes circumstances like a job transfer or a baby on the way demand a speedier move.

What are contingent offers?

Enter the contingency offer, also known as an offer with a catch. You promise you will buy, but only if your own home sells. It’s an option that’s growing in popularity because it keeps you from being locked into a purchase you can’t afford. But it can also cause you to lose your dream home if you’re unable to find a buyer for your own home.

A seller can move on, but only if your contract says so

So, what right does a seller have to ultimately pass on your offer if it’s tied up in a contingency like selling your home? The answer lies in your contract, and each contract is different.

“Whether or not [a seller can] accept a new offer and bump you guys out completely depends on the contract that you signed. You need to go over the details in the contract to see what outs the seller has,” says Melanie Atkinson, a Realtor® with Coldwell Banker Residential Real Estate in Tampa, FL.

Some contingency clauses allow the seller to cancel the contract if you don’t provide a loan commitment within 30 days. Others stipulate that you can’t purchase another property until your home is under contract.

There’s also the 72-hour “kick-out clause,” which requires you to remove the contingency from your offer within three days of the seller receiving another offer; otherwise that seller can “kick out” your contract and move forward with the other buyer who made the better offer.

Courting other offers

If a seller—or the seller’s agent—is still marketing the property to other interested buyers, the seller is required to disclose that there’s an executed contract on the house. But continuing to show it is legal, and Atkinson says it’s in a seller’s best interest to do so. After all, courting other offers is a seller’s contingency plan, something to protect the seller if the sale of your house falls through.

“The contingency may continue until you actually close on the house, and the seller may be able to accept other offers all the way up to that time,” says Phil Lunnon, a Realtor with Lunnon Realty in Lakewood, CO.

So how do you calm your fears about losing a home? If you’re in talks with a motivated buyer for your house, Lunnon suggests removing the contingency in your offer. “If you are confident that the buyer of your home is committed to closing on your home, remove the contingency.”

Of course, that means you’ll be banking on the purchase of your house going through; however, if you’re on the same page as the buyers, removing the contingency on your offer will prove to the sellers you’re committed and improve your chances of closing on the home you really want.

Source: realtor.com

3 Ways to Protect Your Escrow Deposit

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When buying a home, you’ll probably hear your lender or real estate agent use the word escrow. The term escrow can describe a few different functions, from the time your offer is accepted to the day you close on your home — and even after you become a homeowner with a mortgage.

There are essentially two types of escrow accounts. One is used throughout the homebuying process until you close on the home. The other, commonly referred to as an impound account, is used by your mortgage servicer to manage property tax and insurance premium payments on your behalf.

Disclaimer: The information contained in this article is for informational purposes only and is not intended to be relied upon as financial or legal advice, guarantees or warranties of any kind. Reference to escrow accounts here refers to an escrow account established to facilitate the purchase transaction of a new home.

What is an escrow account?

An escrow account is a contractual arrangement in which a neutral third party, known as an escrow agent, receives and disburses funds for transacting parties (i.e., you and the seller). Typically, a selling agent opens an escrow account through a title company once you and the seller agree on a home price and sign a purchase agreement. When you’re buying a home, this escrow account serves two main purposes:

  1. To hold earnest money while you’re in escrow
  2. To handle and disburse the funds until all escrow conditions are met and escrow is closed

How does escrow work?

When you make an offer on a home, the seller may require you to pay earnest money that will be held in an escrow account until you and the seller negotiate a contract and close the deal. This earnest money gives the seller added assurance that you do not intend to back out of the deal, and it protects them in the event that you do. It also motivates the seller to pick your offer over others.

During the escrow process, the escrow agent will handle the transfer of the property, the exchange of money, and any related documents to ensure all parties receive what they are owed. This removes uncertainty over whether either party will be able to fulfill its obligations, and it helps ensure that neither party is favored over the other.

What does in escrow mean?

When you hear the phrase “in escrow”, it means that all items placed in the escrow account (e.g., earnest money, property deed, loan funds) are held with an escrow agent until all conditions of the escrow arrangement have been met. The conditions usually involve receiving an appraisal, title search and approved financing.

While the earnest money is in escrow, neither you nor the seller can touch it. Once conditions are met, the earnest money will likely be applied toward the purchase price or your down payment on the home.

What does it mean to close escrow?

To close escrow means that all of the escrow conditions have been met. You’ve received a home loan, and the title has legally passed from the seller to you. During the closing of escrow process, a closing or escrow agent (who may be an attorney, depending on the state in which the property is located) will disburse transaction funds to the appropriate parties, ensure all documents are signed and prepare a new deed naming you the homeowner.

Afterward, the escrow officer will send the deed to the county recorder for recording before escrow is officially closed. Once closed, you and the seller will receive a final closing statement and other documents in the mail. Check the statement carefully and call the closing agent immediately if you spot an error. Save the statement with your most important papers, as you will need it when you file your next income tax return.

What is an escrow payment?

After you purchase a home, you’ll be responsible for maintaining insurance on the property and paying state and local property taxes. The property tax and insurance premiums you owe are the escrow payments made to your escrow or impound account.

The impound account ensures that the funds for taxes and insurance are available and that premiums are paid on time. Your lender doesn’t want you to miss a tax payment and risk a foreclosure on the home. They also don’t want you to miss a homeowners insurance payment, or they may be forced to take out additional insurance on your behalf to cover the home in the event of property loss or severe damage.

How monthly escrow payments work

The amount of escrow due each month into the impound account is based on your estimated annual property tax and insurance obligations, which may vary throughout the life of your loan. Because of this, your mortgage servicer may collect a monthly escrow payment, along with your principal and interest, and use those collected funds to pay taxes and insurance on your behalf. 

Your lender will notify you 30 days before your next payment if the amount changes. You can also ask your mortgage servicer to walk you through the local impound account funding schedule that applies to your loan. If there are insufficient funds in your impound account to cover the taxes and insurance, your monthly mortgage payment may increase (even though your principal and interest will stay the same on fixed-rate loans).

Initial escrow payment at closing

Lenders usually require at least two months’ worth of insurance and property tax funds in the impound account at closing. The amount you have to prepay into an impound account for these costs is based on your location. Keep in mind that these funds aren’t additional closing costs. Instead, you’re prepaying extra months of home insurance and property tax bills that you would be required to pay when due. Your mortgage servicer will list the initial escrow payment amount due at closing on your loan estimate.

Your escrow analysis statement

Each month, your mortgage statement will show you how much you’ve accrued in your impound account. And each year, your mortgage servicer is required by law to send you an annual escrow account analysis showing you some of the following:

  • The amount of funds received from you
  • The amount of funds paid out for insurance and property tax
  • An estimation of how much the escrow portion of your monthly payment may increase or decrease based on the premiums owed
  • Notice if you don’t have enough funds in your account to pay the estimated tax and insurance due in the next bill (i.e., escrow shortage)
  • Notice if you have a negative balance in your account that is owed to bring your account to current (i.e., escrow deficiency)

Is an escrow account required?

An escrow account for paying property tax and homeowners insurance is generally required by lenders who originate VA, FHA and conventional loans. In some instances, lenders may allow the homeowner to pay the property tax and home insurance as a lump sum instead of setting up an escrow account. If you waive escrow, be aware that some lenders may charge you a fee or an increased interest rate.

While you may not be required to set up an escrow account, you can choose to open one voluntarily to break up insurance and property tax payments into smaller amounts, keep track of payment due dates and avoid surprise bills at the end of the tax year.

Need a home loan? Contact a pre-approval lender today to get pre-approved for a mortgage.

Source: zillow.com

How to Hire a Contractor in 6 Easy Steps

The housing market can be a beast to navigate, but in the past year, it’s become even more difficult to lock in a property that is entirely ready for move-in.

In June 2021, home prices in the U.S. catapulted by around 25% according to Redfin, the Seattle discount real estate brokerage, and the number of homes for sale decreased by nearly 40%.

With these eye-opening statistics, it’s no surprise that people are turning to contractors to help them turn a fixer-upper into a dream home, or to at least press pause on selling a home and make energy efficient and design upgrades to it instead.

But working with contractors isn’t always the most cut-and-dry task, not the least of which is negotiating their fees. According to Homeadvisor, some contractors’ hourly fees can add up to nearly $4,000 by the end of the project.

And with that kind of money coming out of your remodel budget, you can’t afford to misunderstand any aspect of the home improvement process. It’s easy to get caught up in the jargon and nuances of home renovations and agree to something that you don’t truly understand.

Luke Meyers of Parker, Colorado, is a building consultant for a public adjusting firm (read: he helps folks get insurance payments after significant property damages, like those accrued during a hurricane) and also owns his own painting company. Although Meyers is not a contractor himself, he regularly works with a variety of home improvement specialists and is skilled in knowing what to look for when hiring a contractor.

“Making sure you feel good about a contractor is key,” said Meyers. “You want to bring the right contractor into your home — someone who you feel will do good work and who you can trust.”

Here are six more tips from Meyers to make your experience go smoothly:

1. Quotes vs. Estimates

Before signing on to any project with a contractor, it’s important to understand how much money you’re about to shell out.

Contractors should always be able to provide you with either a quote (sometimes called a  bid) or an estimate for the work about to be done. be aware that a quote and an estimate are not the same thing.

An estimate is an educated guess about how much a contractor thinks a home improvement project will cost. The work could cost more, or it could cost less, but the estimate is a ballpark of what you can expect to pay.

A quote (or a bid), reflects a more exact amount. Quotes generally reveal the more-or-less exact amount you can budget for and expect to pay when the work is completed.

“The dictionary definitions of ‘estimate’ and ‘quote’ say one thing,” said Meyers. “But many contractors use the terms interchangeably, so make sure to ask which they truly mean when trying to firm up a budget for any project.”

While many prefer to receive a quote — the more hard-and-fast number — there isn’t necessarily a “better” way to go when it comes to getting either an estimate or a quote. Just be sure to communicate clearly with your contractor.

2. In-Person vs. Over-the-Phone Estimates

It is a standard practice in the renovations industry to provide either an estimate or a quote, as mentioned above. There are usually two types of ways to receive these critical numbers: over the phone, or having a builder come out to the property in person.

Meyers emphasized that it is nearly always better to have a general constructor visit the proposed worksite when formulating an estimate for a home improvement project.

“During the COVID-19 pandemic, there were a lot of construction businesses that moved to doing virtual estimates, which is understandable,” said Meyers. “The problem with that is that the person on the phone or in the video call rarely gets the full scope of work that way. There may be little details that are difficult to share virtually that could change the entire cost of the project.”

Meyers noted that when he works with contractors to draw up estimates, he always tries to have project managers visit the space in-person. This is because specialists like plumbers, drywall experts, and painters have trained eyes to spot, for example, the smallest cracks that can become big, costly problems down the line. Over the phone, it’s hard to get the same level of observation.

It is in your best interest to have a face-to-face interaction with any contractor before they begin work. The last thing you want is to have a builder raise the estimate at the last minute — or cut corners to meet a quote — because of a previously undescribed or unseen aspect or problem with the project.

People work on the exterior of a house.
Getty Images

3. Are Written Contracts Necessary for Hiring a Contractor?

This is an area of hot debate in the construction industry. In general, it’s good practice to have a thorough written agreement between service provider (aka contractor) and customer (aka you) before any work is done. This helps to protect both parties by ensuring the project is completed, and guaranteeing that you’ll pay for it.

However, not all organizations in the construction industry offer contracts.

“It’s important to remember that some tradesmen may not have the business acumen or language skills to put together a legal contract,” said Meyers. “But just because they don’t offer a contract doesn’t mean they won’t do good work.”

Meyers commented that before any contracts are brought to the table, it’s critical that you feel confident in the person you’re hiring.

If you do go the route of a contract, be sure the document contains:

  • Start date for the project
  • Quote or estimate of the project
  • Predicted completion date of the project
  • Any additional fees that could arise like increased supply costs during the work

And be sure both parties actually sign the paper, otherwise the contract is void. The contract could also include a payment schedule, which is helpful for both parties.

Pro Tip

Taking the time to find the right person to do the work on your house can keep you from having to fix mistakes or live with bad work later.

4. Sourcing Materials

It is not uncommon for a contractor to ask if you’d like to source your own materials or go through the building company’s contacts.

There are benefits and drawbacks to both options.

If you source your own materials, you can be sure to get exactly what you want. If a supplier is out of your first choice, you have the ability to quickly decide on an alternative.

However, sourcing your own materials can quickly become stressful and costly. You need to not only be sure to get enough (plus some extra) supplies, but be able to transport them to the worksite, as well. If you don’t have a pickup truck, SUV, or reliable form of transportation, this can be tricky. Plus, you will generally pay full retail price with this option.

Meyers said that many contractors have partnerships with paint, lumber, and other home improvement supply companies. They may be able to provide supplies at anywhere from 15 to 30% off retail price.

This also means builders and their crew will take responsibility for transporting all materials to the renovation area.

Be careful, though. Some construction workers will take their partnership discounts and in turn, mark the prices up once again to their customers, meaning you hardly get a discount.

Meyers suggested doing some simple math to ensure you’re getting the best deal. Calculate how much it would cost for you to pay full retail price for the materials, then ask the crew what their price is. Hopefully, the construction group’s price is lower than the full retail figures.

5. Hourly Charges vs. Square Footage Charges

There are two main ways most skilled workers charge for home renovation services: hourly or by square foot.

Like with everything else, there are pros and cons to each way of determining a project’s total cost. This is another thing that should be discussed and agreed upon before work begins. You could even put it in the written contract if you have one.

Just because a contractor charges one way or the other does not make them a better or worse person to hire, said Meyers.

But, he also cautioned, when workers give an estimate of the number of hours a job will take, it’s highly unlikely they will complete the work faster than the estimate. After all, time is money for hourly workers.

Tying back to our previous point about the benefits of meeting in-person with a contractor, charging by square feet can be a more accurate way of estimating or quoting a customer. When a painter or remodeling expert can see the physical space and charge by square foot, it leaves fewer questions about cost, unlike charging by the hour, a highly variable estimate.

6. Check Contractor Paperwork

“I always want to make sure any contractor I work with is insured,” said Meyers. “That should include both liability and workers’ compensation insurance.”

Meyers explained that if an uninsured crew begins work on your property and one of the crew gets hurt, you could be on the hook for paying that crewmember’s medical bills and other fees.

The same goes for licensing. Always check to be sure the people you are working with have the appropriate licensing to complete a job. All legitimate contractors, electricians, plumbers, painters, etc. will have licenses, usually from a national association and maybe a local municipality, that allow them to legally do their jobs.

Meyers recommended asking your business of choice to supply you with copies of their insurance papers and licenses prior to beginning any work or signing any contracts.

Any reasonable contracting group will be able to provide both with no issue. After all, it is your property the crew is working on. Make sure you do your due diligence to get it done right.

Colorado-based writer Kristin Jenny focuses on lifestyle and wellness. She is a regular contributor to The Penny Hoarder.

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Source: thepennyhoarder.com

4 Tips for Buying a Fixer-Upper

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While the process of buying and renovating fixer-upper homes has increased in popularity due to fix-and-flip home improvement TV shows, not everyone is cut out for  major renovation projects. 

In fact, only 19% of homeowners said their home needed serious updates, and only 3% said their home needed a complete overhaul, according to the Zillow Group Consumer Housing Trends Report 2020. 

Buying a fixer-upper involves purchasing the least desirable home on the block and overseeing its transformation. Whether you’re considering a fixer as an investment — and you plan to sell after construction is complete — or you’re fixing up a home to make it your own, there’s a lot to consider when buying a fixer-upper, from home price to construction costs to financing. 

What is a fixer-upper home?

A fixer-upper is a home that needs repairs, but not so many that it’s uninhabitable or worthy of being torn down. 

Fixer-uppers are usually offered for a lower price than homes in better condition, which makes them appealing to buyers looking to maximize their purchasing power or investors looking to flip the property and turn a profit. 

Should I buy a fixer-upper home?

Most often, people buy fixer-upper homes because the cost of purchasing the home plus renovation costs may total less than what they’d pay for a comparable home in good condition. 

Here are some of the key reasons buyers decide on buying a fixer-upper:

Reduced price

If you have your eye on a popular neighborhood, either for resale value or your own lifestyle, you may be able to get a better deal buying a fixer upper in your desired location and renovating it than purchasing an already-updated home. 

Customizable improvements

When you purchase a fixer-upper, the sky’s the limit when it comes to fixtures and finishes (within your budget, of course). Renovating a fixer-upper can be ideal for buyers with very specific tastes or those who want more control over the aesthetics of their home. When buying a fixer-upper, you avoid paying for the renovations someone else completed, especially if you don’t like them. 

Older home charm

The character of older homes isn’t easy to replicate. Buying an older home in need of some TLC can allow you to restore and maintain time period details, while bringing the home up to today’s efficiency, safety and comfort standards. 

Make a profit

Whether you’re planning to flip or live in the home for a few years before selling, you may be able to turn a good profit based on the renovations you make. Your return on investment depends on the types of renovations you complete, the materials you use and the quality of the work. If profit is the goal, select popular home improvements in your market to increase property value and appeal to a wide variety of buyers. 

Tax incentives

In some metropolitan areas, such as Philadelphia and Cincinnati, buyers who purchase a fixer-upper and renovate to improve the property value may be eligible for a tax abatement or credit. 

How to find fixer-upper homes

Finding the right fixer-upper is all about where you look. Here are a few strategies for finding the right home. 

Search online: Use Zillow to search for homes below market value. You can search keywords such as “fixer upper,” “needs work” or “TLC” to narrow down potential properties. 

Work with an agent: A local buyer’s agent should be able to help you find fixer-upper homes in your desirable neighborhoods. Well-connected agents may even be able to show you homes that haven’t hit the market yet, via word of mouth. 

Search auctions, foreclosures and short sales: Distressed properties may be in fine structural condition but are sold below market value in order to offload them quickly. It’s important to note that these homes are usually sold as-is, and disclosures might not be available, so be sure you have enough extra money in your budget to cover surprise issues. 

What to look for when buying a fixer-upper home

When shopping for a fixer-upper, prioritize the things you can’t change about a home (like its location), or things that would be too costly to change (like significant structural renovations). Here are key factors to consider:

Location

Location is the most important thing to look for, because it can’t be changed. Look for a fixer-upper in a desirable or an up-and-coming neighborhood in order to maximize potential resale value. Finding the right location will also ensure that you’re happy in the home. Pay attention to things that might be important to you, like school ratings, nearby parks and restaurants and commute times. 

The home’s location will also play a part in determining your renovation budget and estimating the home’s post-renovation value. The quality of finishes and upgrades you select should be in line with comparable homes in the same neighborhood if your goal is to recoup costs on resale.

Layout and size

With a fixer-upper, you might be able to change the layout as you see fit, but pay attention to any design and layout ideas that would require removing load-bearing walls. This can be a costly exercise, and sometimes it’s just not possible. Home additions to increase square footage are also expensive and might not be allowed, depending on local zoning requirements and laws. 

Home condition

There’s a difference between a fixer-upper and a home with significant structural defects. Structural and mechanical problems are a lot more expensive to fix than cosmetic ones. Be sure to hire a home inspector to gain knowledge of the home’s positives and negatives — hiring a home inspector is an invaluable step, even if you’re buying a home as-is. Here’s what should be on your home inspection checklist for a fixer-upper:

  • Strong foundation
  • Up-to-code electrical
  • Proper plumbing
  • Solid roof condition (should come with roof certification)
  • HVAC and/or central AC
  • Functional windows

Straightforward cosmetic updates

Prioritize homes that have outdated or worn out finishes that don’t appeal to the general public but can be updated affordably and without too much effort. Ideally, the fixer-upper you buy will only need cosmetic upgrades. Look for homes with:

  • Peeling or dated paint (interior and exterior)
  • Older bathroom fixtures and tile
  • Dated kitchen cabinetry
  • Laminate or tile countertops
  • Stained carpeting
  • Hardwood floors in need of refinishing
  • Leftover belongings or trash that need to be removed
  • Neglected landscaping
  • Old or non-functioning appliances

How to buy a fixer-upper

Buying a home that needs work can be risky, because you won’t know the full condition of the home until you start tearing down walls. That’s why doing your due diligence on the property and neighborhood ahead of time is key.

Get a professional home inspection

When you put an offer on a house, be sure to include an inspection contingency. An inspection contingency allows you to back out of a deal and get your earnest money deposit back if the inspection reveals that the home has serious hidden defects.

Even homes marketed as being in “as-is condition” can be inspected — the only difference is with an as-is home, the seller is telling you that they do not want  to make any repairs based on your findings. 

The buyer is responsible for the cost of  an inspection, which ranges between $250 and $700, depending on the size of the home and your location. In addition to a general inspection, you might also opt for specialized inspections for trouble areas. Common specialty inspections include pests, sewer lines, radon, lead-based paint and structural inspections. Costs for specialty inspections are similar to general inspections. 

A structural inspection reviews the home’s structural integrity, but also lets you know of any natural hazards nearby that could impact the resale value or your own health and safety. You may also consider hiring a structural engineer to assess the property before you make an offer. It will cost between $500-$700 but could save you thousands of dollars in future foundation repairs.

Hire an architect and general contractor

An architect can create a new layout for a home, create plans and blueprints and tell you what is and isn’t possible. Some cities require you to submit architectural plans to acquire home permits, making an architect a necessity. The average cost for an architect is around $5,000, depending on the scope of your project. 

Your home inspector should be able to give you a rough estimate of what it would cost to adequately repair problem areas that come up in an inspection, but since they’re not the one who will be doing the work, it’s best to get a more accurate quote from a contractor. Whatever they quote you, add a 10% contingency for any problems that come up along the way. Be sure to get quotes from a few contractors and do your due diligence in checking their licensing and customer reviews. 

Budget for improvements

Working with your contractor, be sure that your budget takes into consideration all applicable costs. Don’t forget to include:

  • Permit fees, if applicable
  • Cost of materials, like flooring, paint, light fixtures, cabinetry, countertops and hardware
  • Cost of labor, including general contractors, plumbers, electricians and inspectors
  • Cost of living during renovations, if the home will be uninhabitable during the project

Know your limits

Above and beyond the financial concerns, you also need to gauge your tolerance for a major renovation project, especially if you plan to save money by doing some of the work yourself. Home renovations are not as easy as they look on TV and if it’s your first time, a lot can go wrong. Even if everything goes right, there’s a lot of hassle involved in a large-scale construction project. You’ll have to live in a construction zone or move elsewhere temporarily, while still paying all the carrying costs for the home. 

If the thought of a months-long renovation is more than you’re willing to take on, but you’re looking for a move-in-ready home, consider a Zillow-owned home. Every home has been recently repaired for buyers to avoid costly surprises. 

Financing options with fixer-upper loans

You can purchase a fixer-upper with a traditional conventional loan then pay for all the improvements out of pocket. Or, you can get a fixer-upper mortgage that’s designed to help you finance both the house itself and the renovations. Common types of home loans for fixer-uppers are: 

FHA 203(k) standard

An FHA 203(k) Standard loan finances the purchase and renovation of a primary residence. Here are the key requirements:

  • Minimum credit score of 500 with a down payment of 10%, or a credit score of at least 580 with down payment of 3.5%
  • The total cost of the loan must fall under FHA mortgage limits in your area
  • No luxury improvements (like pools) are allowed, but structural work is allowed
  • Requires a HUD consultant to approve the architectural plans, oversee payments to contractors and review inspections to ensure the home meets structural integrity and energy efficiency standards
  • There are limits on how soon you can resell (not within 90 days)
  • The contractor is paid out of an escrow account managed by the lender

FHA 203(k) streamlined

This financing option has similar requirements as the FHA 203(k) Standard, but it’s meant for simpler, cosmetic renovation projects, as it has a spending limit. 

  • Minimum credit score of 500 with a down payment of 10%, or a credit score of at least 580 with down payment of 3.5%
  • For cosmetic upgrades under $35,000
  • There are limits on how soon you can resell (not within 90 days)
  • The contractor is paid out of an escrow account managed by the lender

HomeStyle loan

A HomeStyle loan is a combination home loan and home improvement loan, guaranteed by Fannie Mae. 

  • Minimum credit score of 620; minimum down payment of 3 or 5%, depending on a few factors like owner occupancy, first-time home buyer status and income
  • Allows for other improvements that aren’t covered under an FHA 203(k), like pools and landscaping—but note that all improvements need to be “permanently affixed to real property (either dwelling or land)”
  • The contractor is paid out of an escrow account managed by the lender
  • You must use a certified contractor

CHOICERenovation

A CHOICERenovation loan is a combination home loan and home improvement loan, guaranteed by Freddie Mac. 

  • You can finance renovations that cost up to 75% of a home’s value
  • Money can be used for upgrades that prevent natural disasters
  • You can DIY the work and get a down payment credit
  • Requires multiple appraisals to ensure you’re upholding the terms of the contract and that the agreed-upon renovations make the home meet its estimated value

Source: zillow.com

Managing Your Money, Together

To learn more about how our Minters are achieving their financial goals, we reached out to everyday Mint users, just like you, to hear their stories. Whether it’s paying off student loans, or working toward buying a home, we’re so inspired by the dedication this community has shown in working toward your goals and dreams.

One of the Minters we connected with is Jordan. He shared with us how he’s used Mint to reach a number of his financial goals. Check out his #EmpowerMint story:

My wife and I have been interested in getting out of debt ever since the day we took on student loans. With the desire to pay those loans off, we strived to learn more about budgeting and personal finance.

As we grew in our journey, there were many financial things we questioned that felt ‘normal.’ We heard so many messages that emphasized the need to have the newest toys to be happy, that having debt is normal, and that most people live paycheck to paycheck. We realized that we didn’t feel comfortable with any of that, and that we found satisfaction in being content with what we have. 

Knowing that money issues were often a problem area for couples, my wife and I started using Mint shortly after we got married in 2010 to ensure transparency and partnership from the beginning. We found Mint to be a terrific tool for us to have a complete picture of our financial situation. During this time, I was working full-time and my wife was finishing up her last year in nursing school. Mint was an immediate help in keeping track of where our money was going and in starting budget discussions that have proved to be invaluable in our marriage. It also helped initiate discussions on both near-term and long-term goals, which have been so key in helping us plan both strategically and aspirationally. 

As time went on, Mint was instrumental in helping us achieve so many of our goals including:

  • Paying off student loans
  • Paying for grad school with cash
  • Preparing for kids
  • Starting a 529
  • Saving for a down payment
  • Buying a home

Our current goal is to complete our 15-year mortgage in under 5 years. A combination of Mint, aggressive savings, overtime shifts, and side hustles have helped put us in a position to achieve this goal within the next 12 months. Once that goal is complete, we’re excited to have a little fun and celebrate this accomplishment, and then prepare for the next chapter in our financial journey. 

In addition to this goal, we also have various net worth milestones we would like to achieve in the next 1-, 5-, and 10-year periods. We are very excited about the concept of financial independence, and would like to be in a position where we have the opportunity to focus our attention on things outside of work, such as further investing in our family and causes that are important to us. With Mint, we can see how the choices we’re making are helping move us closer to achieving these goals. 

Today, we check Mint on a daily basis in order to stay on top of our expenses and monitor for any fraudulent activity. Years ago, Mint helped me identify a fraudulent charge almost immediately, enabling me to notify our bank and get the issue resolved. Reviewing our expenses enables us to stay within our budget, catch fraudulent activity, and follow the ‘every dollar’ budgeting rules that have been so helpful for us. In addition, linking our accounts has automated what would otherwise be a very manual and time-intensive process. 

I have also loved using the trends feature to have full visibility into exactly how our money is being spent and to help ensure we’re always partnering as we work towards our financial goals, rather than feeling like one person is pulling the other along. We can budget with transparency and not feel any need to hide transactions for personal expenses and rewards or small splurges. 

The trends feature has also allowed us to get a sense of what our typical spending has been in different categories. We periodically review our budget, and being able to easily see our historical spending in different categories has helped us set realistic targets, as well as track our progress when we are attempting to change habits. Lastly, being able to see changes in our net worth over the years has been inspiring, as we have been able to see in real-time how decisions to save or forego immediate gratification can have long-term benefits.

Beyond that, we have found a great deal of joy in doing things ourselves, whether it is cooking meals for the week, doing our own car maintenance, or trying to fix something ourselves before calling someone. Additionally, the satisfaction has compounded as we’ve seen that making these choices has helped us not only learn new things, but also in achieving our goals. 

Knowing what we know now, we’re really excited to pass these values on to our kids, and we’re happy to discuss them with anyone who asks. Additionally, I can see a ‘life’ after work that involves volunteering in some form in the personal finance field, whether that is teaching folks about budgeting or just encouraging them in their financial journey.

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Source: mint.intuit.com