The promises of a reverse mortgage -- never having to pay a mortgage bill again and using your home's equity to finance retirement -- can sound too good to be true. It almost was too good to be true during the Great Recession, when more borrowers were withdrawing most of their home equity at closing and the federal government's reverse mortgage program was failing. Legislation in 2013, however, kept the program from dying by instituting some changes, and made it safer for older Americans.
The new reverse mortgage rules from the U.S. Department of Housing and Urban Development's Home Equity Conversion Mortgage program, or HECM, are meant to protect older Americans from themselves by reducing withdrawals, lowering loan amounts, and having the ability to pay the costs of owning a home, along with higher fees. Here are the main rule changes:
Maximum loan amounts: The maximum amount of home equity that can be borrowed against has been lowered by 10 to 15 percent. The idea behind this rule change is to prevent borrowers from spending all of their equity at once. The major benefit of a reverse mortgage is eliminating a monthly mortgage payment, which can be reason enough for older Americans to get one that will greatly help their finances, says Sean McGeehan, a mortgage loan officer in Illinois.
"It's a life changing program that can do a lot of good for people," McGeehan says. Borrowers are charged 0.5 percent of the loan amount as the mortgage insurance premium at closing, much less than the 2 percent charged under one of the previous programs.
Reduced withdrawals in first year: The new program limits homeowners from borrowing more than 60 percent of their loan in the first year, which stops them from taking out a huge chunk at one time and then spending it. They can take out more, but only to cover "mandatory obligations" such as paying off an existing mortgage or making repairs required by the lender.
Credit card debt isn't considered a mandatory obligation. To take out more money for such obligations, a higher upfront mortgage insurance premium of 2.5 percent of the home's appraised value is required -- much more than the normal 0.5 percent.
Ability to pay: Borrowers must be able to pay property taxes and homeowners' insurance premiums under the new rules meant to ensure that homeowners can afford to stay in their homes. "A lot of people were getting reverse mortgages and not paying their property taxes and insurance, and they were losing their house," McGeehan says.
The financial assessment is based on credit history and income sources, weighed against living expenses, debts and real estate taxes and insurance. A single homeowner needs a "residual income" of $540 to $589 per month, and a couple needs $886 to $998 per month to qualify for a reverse mortgage.
Being able to take out less money from your home through a reverse mortgage, along with the other rule changes, may ultimately sound like bad news for homeowners. But in the long run, they're meant to prevent older Americans from spending all of their home equity loan at once and then being unable to afford property taxes and other expenses of owning a home.
Even if you're not planning to sell your home anytime soon, it's an inevitable question when you consider remodeling: How much will this improvement add to the value of my home? Surprisingly, much of the time the answer is not as much value as it costs to actually make the improvement. But some home renovations bring you more bang for your buck.
The top-ranking home improvement? A new front door, which on average adds 96.6 percent of the amount you spent to the value to your home, according to Remodeling magazine's annual Cost vs. Value Report for 2014. But "it has to be the right front door," says Steven Aaron, owner of the Steve Aaron Realtor Group at Keller Williams Beverly Hills and one of the protagonists of the HGTV series "Selling LA." Keep in mind that sometimes painting the existing front door provides the same payoff.
All 35 projects included in the Cost vs. Value report added more value this year than last year, and this is the second consecutive year of increases after several years of decline. Replacing old elements, such as doors, windows and siding, in general yielded a better financial return than bigger remodeling projects, such as additions. But real estate agents and remodelers say updated kitchens and baths still bring a significant payoff, especially at resale time.
The report found that kitchen projects yielded a higher return than bath projects, with a minor kitchen remodel adding 82.7 percent of the project's cost back to the home's value. Kitchens are important, Aaron says, because would-be buyers often overestimate how much they would cost to update.
"If you have a dated kitchen ... and a buyer walks into that kitchen, they're going to think that in order to redo that kitchen, they're going to have to spend $40,000 or $50,000," Aaron says.
But the average cost of a minor kitchen remodel -- new cabinet doors, appliances, countertops, sink, faucet, paint and hardware -- was $18,856 nationwide, according to the Cost vs. Value report. Savvy shoppers can do it for less than the buyer assumes.
But, like the front door, it's important to do the right kitchen remodel. Adding a $75,000 kitchen to a $100,000 house is unlikely to yield $75,000 in value, although it may make you a happy chef. As a general rule, look to spend about 25 percent of the home's value for a new kitchen and 12 percent to 15 percent for an updated bathroom, says David Pekel, president and CEO of Pekel Construction in Milwaukee and a master certified remodeler.
Putting an ultramodern kitchen into a 100-year-old Tudor home isn't smart, either. "Whatever your home improvement is ... I strongly discourage designing new spaces in a fashion that's incongruous with the rest of the house's architectural vernacular," Pekel says. "It doesn't really add value. It detracts."
Whether certain improvements will pay off varies not only regionally, but also neighborhood by neighborhood, based on who is going to live in the house. For example, a pool adds more value to homes in some Los Angeles neighborhoods than in others, Aaron says. In cities with colder climates, a pool may not add any value. (Pools are not included in the Cost vs. Value report.)
Renovations within the existing envelope of your home -- those that don't require you to build an addition or expand the roof and foundation -- often return more value than building extra rooms onto your home. For one thing, they're much cheaper.
Converting an attic into a bedroom ranked third of the 35 improvements in the Cost vs. Value report, returning 84.3 percent of the amount spent. Turning attics into usable space is a popular and profitable improvement in the Milwaukee area, where much of the housing is older, Pekel says.
Adding a powder room and then closing off a hall bathroom to make a bedroom suite is popular in Los Angeles, and it doesn't require adding to the home. But an addition can pay - especially the right addition. Aaron tells the story of an investor client who added a 500-square-foot family room off the kitchen of a 1,200-square-foot house in the Los Angeles area, opening the home to the yard. The cost was $20,000, but it added $100,000 to the value of the house, which sold for $850,000 instead of the projected $750,000. "It's a smart addition that's not that expensive," Aaron says.
Replacing windows with French doors that open to the backyard is another popular, and not very expensive, renovation project. "It makes the room feel bigger and gives you somewhere to go," Aaron says. "Suddenly your home just feels more spacious."
In the years before the real estate market crashed, additions were the most popular remodeling project, Pekel say, with family rooms, kitchens and master suites among the top choices. But in the current lending climate, it's easier to get a mortgage to buy a bigger house than it is to get a home equity line of credit to add to an existing home.
Among the home improvement projects Pekel is seeing these days, many focus on updating the envelopes of homes with new siding, windows and insulation. For people who plan to stay in their homes, investing in those projects, as well as in more energy-efficient heating and air conditioning systems and appliances, saves money all year.
He points out that resale value is one factor to consider in a remodeling project, but the value to you as an occupant matters as well. This is especially important if you plan to stay in the home for a long time.
"Remodeling from the perspective of looking at it from an investment strategy is a terrible model," Pekel says. "What we can't quantify is the value of lifestyle."
Here are the home renovations that Remodeling's Cost vs. Value study says will give you the biggest bang for your buck, as well as projects that generate the lowest return.
Renovations that bring the greatest percentage return on investment:
o. Entry door replacement: 96.6 percent o. Deck addition (wood): 87.4 percent o. Attic bedroom: 84.3 percent o. Garage door replacement: 83.7 percent o. Minor kitchen remodel: 82.7 percent
Renovations that yield the smallest return:
o. Home office remodel: 48.9 percent
o. Sunroom addition: 51.7 percent
o. Bathroom addition: 60.1 percent
o. Backup power generation: 67.5 percent
o. Master suite addition: 67.5 percent
It's as if the entire and improbably coincidental scenario had been scripted for a reality TV show: An outlandishly-behaved teenager named Justin Bieber flees Los Angeles and his sprawling home for Atlanta to make room for his replacement, the freshly divorced youngest sister of the ubiquitous Kardashian family. Quick, someone check with TV producer and entertainment industry titan Ryan Seacrest, who brought us "Keeping Up With The Kardashians." Maybe this entire house-flipping deal between Justin Bieber and Khloe Kardashian was ordered up by the people over at the Nielsen ratings.
Justin Bieber sings "Never Say Never" to Kim and Khloe Kardashian, which was appropriate given the real estate adventure that followed. Source: Celebuzz. Several sites, including Yahoo! and The Real Estalker, are reporting that they've confirmed Kardashian's purchase of the 7-bedroom, 8-bathroom, 10,000-square-foot mansion. The 1.28-acre property was the scene of some of Bieber's terrible teen antics, including an egging of a neighbor's yard, the drug arrest of one of Bieber's cohorts and, the straw that seems to have ended the Bieb's "magical" run in Calabasas: A dispute with former NFL star Keyshawn Johnson, who was so concerned about Bieber's speedy driving habits that he called the police.
Whether Bieber decided he's had enough of southern California's limelight, or whether the Hollywood crowd has successfully squeezed Bieber from its hive, it's probably a good move on everyone's part.
Bieber has been house hunting in Atlanta (between "arresting" trips to Miami and Panama) and Kardashian has been looking for a new place to set up shop after divorcing NBA player Lamar Odom, so the new arrangement makes sense. Just weeks ago, Kourtney Kardashian and her partner, Scott Disick, purchased Keyshawn Johnson's custom-built home.
This means two of Kris Kardashian's daughters will be within a stone's throw -- or egg toss, as Bieber proved -- from each other in Calabasas. Kim Kardashian, meanwhile, is hanging around the Calabasas neighborhood, too. She and her baby with fiance Kanye West are living at Kris Jenner's home while their Bel Air mansion is being renovated and redecorated ahead of the big Paris wedding.
It's the house that Jennifer Aniston and Justin Theroux rented back in 2012 when the allegedly engaged Hollywood couple were first swooning over each other. But this modern home in Beverly Hills, Calif., is also a property that has suffered through a series of price adjustments as it seeks its rightful market value. The 6,600-square-foot home at 425 Martin Lane has hit the market again, with another price reduction.
The list price is now $9.9 million, down from the original list price of $14.9 million the owners sought in 2011. According to property records, they spent $4.6 million on the place in 2010 and then gave home a total remodel. Aniston and Theroux paid $40,000 a month to rent the five-bedroom, 6.5-bathroom home back in May 2012, when they needed a place to crash while they renovated a Bel Air property.
Aniston, like many stars, enjoys flipping high-end homes. She may not have quite the real estate collection of Ellen DeGeneres, but when it comes to big Los Angeles real estate purchases, the former "Friends" star has done pretty well, selling her Ohana house for $38 million and picking up the Bel Air property for $22 million after several price reductions.
It's tempting to skip the annual furnace or boiler tune-up. Service contracts are expensive and you can often get away with skipping a year or two, especially if your fuel is gas. Gas burns cleaner than oil, so repairs are less likely and it's less critical to clean components. For a number of reasons, however, it can be risky to defer maintenance of HVAC equipment.
Safety: Cracks in heat exchangers are not uncommon and may go undetected for long periods if the system is not inspected regularly. When such cracks occur, combustion gases mix with the household air that's being heated and delivered throughout the home. These gases can include carbon monoxide, a colorless, odorless and poisonous gas that, if released into a home without a CO detector, can have tragic consequences. The HVAC technician will also check for other dangerous leaks, such as cracks at the joint where the exhaust stack meets the chimney.
Equipment life: Heating equipment that is well maintained will last 15 to 30 years; poorly maintained equipment can fail within five. No one wants the expense of replacing a furnace to come around any faster than necessary.
Efficiency: Heating equipment gradually loses efficiency the longer it goes without being serviced. A well-maintained furnace, boiler or air conditioner can save 10 percent or more on fuel costs -- typically more than enough to pay for the tune-up. A good service technician will also check your ductwork for leakage. According to Energy.gov, such leaks can account for losses of 20 percent or more.
Comfort & health: A tuned-up furnace will improve your comfort. Water and air temperatures are optimized, and your thermostat will be checked and recalibrated if necessary. And if you haven't already taken care of it yourself, most tune-ups will include a filter replacement to protect your equipment and remove some of the potentially unhealthy particles that float around in your home.
A quality furnace tune-up: Annual furnace or boiler maintenance is not a job that can be done in 20 minutes. It will take a professional at least 45 minutes to check things like pilot ignition, thermostat operation, draft and switches (several of which ensure safety). The technician will check mechanical components, such as bearings, pulleys and belts, to make sure they are lubricated and in good working order. To maintain peak efficiencies, the technician will also check blower wheels and heat exchangers for cleanliness and carefully clean them. Wiring must be examined for loose connections and frayed insulation. If the stack pipe to the chimney joint is loose, it must be reset with refractory cement. System performance should be measured and recorded before and after the tune-up.
Oil produces far more soot than gas does, and because all that soot can foul components, oil-fired furnaces and boilers may require more time to service. Oil-fired systems also have more moving parts, including burners, circulators, fuel tanks, and fuel tank filters. Homeowners who burn oil should have their chimneys checked annually as well for soot accumulation. This is typically not included in a furnace or boiler tune-up. Hire a certified chimney sweep to clean the chimney of an oil-fired furnace or boiler.
Be sure to hire only a certified, licensed and insured HVAC contractor to tune-up your HVAC equipment. Ask exactly what the service includes -- and hang around to watch as the work proceeds. Your furnace or boiler is probably the most expensive and important appliance in your home, so you should show it the care and respect it deserves.
Bob Vila is the home improvement expert widely known as host of TV's This Old House, Bob Vila's Home Again, and Bob Vila. Today, Bob continues his mission to help people upgrade their homes and improve their lives with advice online at BobVila.com. His video-rich site offers a full range of fresh, authoritative content -- practical tips, inspirational ideas, and more than 1,000 videos from Bob Vila television.
Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow or AOL.
Thanks to one dedicated "Seinfeld" superfan you can now virtually barge into Jerry's iconic Upper West Side apartment and head straight for the fridge -- just like a certain wild-haired neighbor from across the hall. All you need is an Oculus Rift virtual reality headset and a free download from the website of 3D artist Greg Miller who, as seen in the video above, made the incredibly detailed recreation as a way of teaching himself how to use the latest in VR technology.
Miller says on his website that he got the idea to create Jerry's Place VR because "Television is virtual reality in some ways. We make believe that Jerry's place is actually a Manhattan studio and Monk's Cafe is just down the street. " He painstakingly recreated the apartment (pictured above) using Google Image Search and screen-grabbed stills from the classic sitcom as a guide, even giving us a look at places the television cameras never showed us, like the inside of Jerry's bedroom or the wall behind the TV.
While the Oculus Rift was developed for video gaming, Jerry's Place VR isn't a game (though a Seinfeld virtual reality game where you could visit the Soup Nazi or take a nap under George's desk does sound pretty amazing). Miller did sprinkle eleven references to specific episodes throughout the apartment for trivia-loving fans who want to turn their visit to the funnyman's fictional apartment into a virtual scavenger hunt.
He's also quick to point out that he's not affiliated with the Seinfeld team, and he's not looking to make any money off of the project, saying "This is a fan project, for the fans!"
NEWARK, N.J. -- A "Real Housewives of New Jersey" star and her husband face prison time after they pleaded guilty this week to federal fraud charges for concealing income and lying during bankruptcy proceedings. In contrast to their often raucous on-screen personas, Teresa and Giuseppe "Joe" Giudice stood solemnly in front of U.S. Magistrate Esther Salas in Newark, speaking in barely audible tones as they admitted engaging in financial fraud.
Both pleaded guilty on Tuesday to conspiracy to commit mail and wire fraud and three types of bankruptcy fraud. Joe Giudice also pleaded guilty to failing to file a tax return for 2004, though he acknowledged he didn't file taxes on income of approximately $1 million between 2004 and 2008. They had been scheduled for trial on more than 40 counts and had unsuccessfully sought separate trials. (They're pictured above, leaving court after their pleas.)
Teresa Giudice said in a statement read by her lawyer, Henry Klingeman, that she takes responsibility "for a series of mistakes I made several years ago" and said she will make a statement to the court when the couple is sentenced on July 8. "I will describe the choices I made, continue to take responsibility for my decisions and express my remorse to Judge Salas and the public," she wrote. "I am heartbroken that this is affecting my family -- especially my four young daughters, who mean more to me than anything in the world."
Under federal sentencing guidelines, Joe Giudice faces a potential sentence of 37 to 46 months and Teresa Giudice could get 21 to 27 months, though Salas could deviate up or down from those ranges. Klingeman said after Tuesday's hearing that his client will seek probation. Joe Giudice is an Italian citizen and could be deported upon completion of his prison term, said his attorney, Miles Feinstein. Giudice came to the U.S. as an infant and wasn't aware that he wasn't an American citizen, Feinstein said.
"It would be a grave injustice, and inhumane, for him to be deported," Feinstein said. The couple was charged last year with exaggerating their income while applying for loans before their show debuted in 2009, then hiding their fortunes in a bankruptcy filing after their first season aired. The couple filed for bankruptcy in 2009 and claimed they owed $11 million, including $2.2 million in mortgages, $13,000 to Neiman Marcus and Nordstrom and nearly $12,000 to a fertility clinic, according to court documents.
On Tuesday, they admitted submitting fraudulent mortgage and loan applications and fabricating tax returns and W-2 forms.
Teresa Giudice has parlayed her fame into cookbooks and specialty food, drink and hair care product lines. On the show, she is known for her expensive tastes and combative relationship with her brother and sister-in-law. She has continued to work on the show while she has been under indictment and plans to continue until her sentencing, Klingeman said.
WASHINGTON -- A surging stock market and rebounding home prices boosted Americans' wealth to a record in the final three months of last year, though both trends have slowed so far in 2014.
Household net worth jumped nearly $3 trillion during last year's fourth quarter to $80.7 trillion. Stock and mutual fund portfolios gained nearly $1.7 trillion, or 9 percent, according to a Thursday report by the Federal Reserve.
The value of Americans' homes rose just over $400 billion, a 2 percent gain. And checking account balances, pensions plan assets and retirement savings, such as 401(k)s, also increased.
Strong wealth gains tend to trigger more consumer spending, a critical fuel for economic growth. Higher household net worth is one reason economists have forecast that the U.S. economy will accelerate later this year.
Household wealth, or net worth, reflects the value of homes, stocks, bank accounts and other assets minus mortgages, credit cards and other debts.
Last year, home prices nationwide rose by the most in eight years. And the Standard & Poor's 500 index (^GPSC) of large stocks jumped 32 percent. So far this year, home-price gains have slowed, and the S&P 500 has risen just 1.4 percent.
Rising home prices are helping people rebuild ownership stakes in their homes. The equity that Americans as a whole have in their homes has reached 51.7 percent, the highest point since before the recession began. That's up from a record low of 36.5 percent in the first three months of 2009.
The Great Recession hammered Americans' net worth, cutting their overall wealth to $55.6 trillion in the first quarter of 2009. That was 19 percent below the pre-recession peak of $68.8 trillion.
U.S. wealth has since recovered. But households haven't benefited equally. Much of the rebound stems from stock market gains. Yet roughly 10 percent of households own about 80 percent of stocks. Most middle-class wealth stems from home ownership, and house prices nationwide remain below the peak reached in the spring of 2006.
The Fed's figures aren't inflation-adjusted and don't account for population growth.
Last month, economists at Ohio State University adjusted for both factors and concluded that, as of mid-2013, the net worth of the average U.S. household is still 14 percent below the pre-recession peak.
Still, rising wealth and an improving economy are encouraging more Americans to take on debt, which can be a sign of confidence. Total household debt ticked up 0.4 percent in the quarter, mostly because Americans took out more auto and student loans.
But that doesn't mean consumers are returning to pre-recession habits of building up excessive debt. Mortgage debt fell last quarter, as it has in almost every quarter for the past five years.
And after-tax income is ticking up, making it easier for Americans to finance their debts. Total household debt as a percentage of income was largely flat in the fourth quarter compared with the previous three months, at 109 percent. But that's down from a peak of 135 percent at the end of 2007, just before the recession.
On Valentine's Day, some get chocolates or a bouquet of flowers. Maybe something sparkly. Lauren Conrad, on the other hand, got an oceanside home in Laguna Beach, Calif. According to property records, Conrad dropped $8.5 million on a classic 1937-built home on Feb. 14. The single-level home sits on a nearly half-acre lot offering dramatic views of Santa Catalina Island and the Southern California coastline stretching to Los Angeles.
The listing describes Conrad's new digs as "impeccably remodeled" with new bathrooms and a new kitchen featuring high-end appliances. Beamed ceilings and restored wood floors add to the home's overall charm. Measuring 2,910 square feet, the house has three beds and four baths.
To most people, New York City has become an otherworldly real estate market. It's the town where a skyrise condo just sold for more than $50 million -- and it was only that cheap because it was raw space. But to the global rich, New York is a bargain. A new report shows that on a per-square-foot basis, New York is half price compared to some other favorite cities of the rich.
The Knight Frank Wealth Report shows that the tiny, tony principality of Monaco (pictured) remains the most world's expensive real estate market. The report found that $1 million will only get you 15 square meters of space, or about 160 square feet. So you could buy a $1 million bedroom -- and presumably share a bathroom and kitchen with other property-poor millionaires. In New York, that same $1 million gets you a whopping 30 square meters of space, or about 430 square feet. That puts New York down at No. 6 on the list, below Monaco, Hong Kong, London, Singapore and Geneva.
"New York is a definite bargain from the global marketplace perspective," said Dolly Lenz, founder of Dolly Lenz Real Estate in New York. "It's not a bargain from the perspective of New Yorkers who have seen the prices quadruple over the past 20 years. But the wealthy look more globally, and when they compare these cities, New York is great value."
But the report -- done by London-based real-estate firm Knight Frank along with research firm WealthInsight -- had other interesting tidbits when it comes to the global wealthy and real estate. They include:
Biggest price gains. The city that had the biggest price increases for luxury real-estate was Jakarta, Indonesia, with prices up 38 percent for prime, luxury real estate. Auckland, New Zealand, ranked second, at 29 percent, while Bali, Indonesia, ranked third, with prices up 22 percent.
The darling of the rich. London is the favorite city of the rich. The study ranks cities by their attractiveness to the rich based on four criteria: economic activity, quality of life, knowledge/influence and political power. London ranks first in the world, followed by New York. The two cities always dominate the top of the list (they are like the Gates and Buffett of rich cities), and they are basically tied.
But, as seen in the chart below, the study projects New York will eventually retake the lead.
"History, location and their long established wealth mean that London's and New York's positions remain unassailable," the report said, adding that New York will soon get an edge from political power and economic activity.
The Skyscraper Index. Knight Frank also ranks skyscrapers by the capital value of upper-story floor space. Hong Kong ranks first, with a value of $69,222 per square meter. Tokyo ranks second, with around $40,000 per square meter, followed by New York at around $25,000.
WASHINGTON -- Average U.S. rates on fixed mortgages fell after three weeks of rises, edging closer to historically low levels.
Mortgage buyer Freddie Mac said Thursday that the average rate for the 30-year loan declined to 4.28 percent from 4.37 percent last week. The average for the 15-year mortgage fell to 3.32 percent from 3.39 percent.
A report released Tuesday by real estate data provider CoreLogic (CLGX) showed that U.S. home prices rose 0.9 percent in January after three months of declines, as a tight supply of properties likely supported prices despite slower sales.
Economists believe such outsize price gains might not continue much longer, however.
Freaked out because your mortgage payment has increased? Before you write that next mortgage check, let's investigate what's going on with the payment. The increase could come from a number of factors and there may be something you can do about it besides paying more each month.
Many lenders incorporate the following elements into the bill for a typical 30-year mortgage: o. Principal: This is the amount of the payment that goes toward paying off the original amount of money borrowed, excluding the interest. o. Interest: This repays the lender for taking the risk on a loan. Initially, most of your monthly payment will go toward the interest. o. Taxes: The mortgage company estimates the property taxes your county and/or state will charge, divides that amount by 12, and collects it monthly. The lender will then pay the taxes when they're due each year. o. Insurance: You can find two types of insurance in this portion of your bill. The first is your homeowners insurance. Lenders require you to have home insurance to protect their investment. The second is private mortgage insurance. If you did not make a down payment of at least 20 percent, your lender usually requires you to purchase this insurance. It protects the lender in case you default on the mortgage.
Why did my bill go up? Let's take a closer look at why your lender suddenly asked you to pay more. Typically, the total you pay toward the principal and interest should remain the same throughout the life of the mortgage (though the ratio of how much goes toward principal and toward interest will change).
Adjustable rate mortgages are the exception to this rule. This type of mortgage allows lenders to change the interest rate periodically. Adjustable mortgage rates are not as common as they once were, however.
More than likely, you can rule out principal and interest and look to one of the other two categories.
Property taxes -- Your property taxes may have gone up. Contact your county and city to find your local tax rate. If taxes are the culprit, there's little you can do - other than having your property reassessed. This is risky because there's no guarantee the assessed value of your property will go down, and it could go up, which would mean you'd owe even more.
Insurance payments - If it isn't taxes, consider your insurance payments. Like principal and interest, private mortgage insurance premiums generally don't change after your loan closes. So you can eliminate that as well. That leaves home insurance premiums. Providers do increase them from time to time, however there are steps you can take to reduce this cost.
Shop your policy. This is a good idea even if your monthly payments don't increase. Consumer advocates recommend that you shop for new home insurance quotes at least once a year. Carriers evaluate risk differently, which means the potential exists for wide variances in premiums.
Ask about discounts. Providers offer a number of discounts. One of the most lucrative is the home/auto bundle. You can save up to 20 percent on your premiums simply by purchasing your home and car insurance from the same provider. You also can score price breaks of 10 percent or more for having a monitored home security system. Many providers give discounts if no one in the home smokes; that's because it lowers the fire risk. Discounts vary widely by provider, so find out whether you're receiving every price break available.
Increase your deductible. Another way to lower your monthly payment is to increase your deductible - the amount you're responsible for paying when you file a claim. Be sure, however, to keep the deductible at an amount you can afford. Exercise great caution if you take this step.
The best advice? Monitor your mortgage payment and all its components. You can fight some increases, and you should.
Arthur Murray writes for HomeInsurance.com, an online insurance resource for homeowners and drivers across the country. Offering comparative homeowners and automobile insurance rates, consumers rely on HomeInsurance.com for the most competitive rates from the top-rated insurance carriers in the country. The HomeInsurance.com blog provides fresh tips and advice on a range of financial topics to help homeowners and homebuyers make educated decisions about their insurance purchases.
Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow or AOL Real Estate.
If you are shopping for a new home, it's equally important to shop around for the best mortgage rate, too. Rates can vary greatly between lenders and even seemingly small differences can end up saving -- or costing you -- a lot of money over time. Explore your options by comparing personalized mortgage rates to ensure you're getting the right loan.
"Although the difference in monthly payment between a 4.5 percent interest rate and a 5.5 percent interest is not dramatic, your savings in interest paid over the life of the loan is significant," said Erin Lantz, director of Zillow Mortgage Marketplace. "Mortgage rates will likely rise to 5 percent by the end of 2014 due to an improving economy and policy changes by the Federal Reserve. By buying a house while interest rates are still incredibly low, you could end up saving more than $52,000 over the course of 30 years."
For a man who appears to have as many lives as a cat, Keith Richards has pounced on a new New York City apartment that's sure to give the Rolling Stones co-leading man another lease on life. According to Luxe Listings New York, Richards and his wife, Patti Hansen, are the new owners of a duplex penthouse. The four-bedroom, four-bathroom co-op cost the couple $10.5 million and is apparently a combination of three units, which means the place has three separate terraces from which to enjoy the Manhattan skyline views.
The home had apparently been on the market since late 2012, with an original list price of $15 million. Richards and Patti Hansen celebrated their 30th anniversary last year, along with Richards' 70th birthday. On his website, Richards announced the recent birth of his fifth grandchild, so at least when the family gets together in New York, Richards and Co. will have a suitable place to spread out and enjoy the fruits of Richards' music-history labors.
Bargains may be few and far between in the current real estate market, but buyers can get a deal if they are willing to purchase a home in an up-and-coming neighborhood. But discovering a neighborhood with potential can be tricky.
"When you buy in an up-and-coming neighborhood, you are able to get in on the ground floor of appreciation," says Michael Corbett, real estate and lifestyle expert for real estate website Trulia. "You really want to look for neighborhoods where you can increase the value; the best way to do that is in transitional neighborhoods on the rise."
But like all investments, buying in a developing neighborhood comes with risks. After all, getting a bargain on a home only becomes an investment if the neighborhood continues to develop and home prices appreciate. Real estate experts offer the following signs homebuyers should be aware of when evaluating emerging neighborhoods:
Development Is Already Happening: Construction activity, whether it's retail, condominiums or residential homes, is a good sign of an area about to boom. "If you start to see large-scale development in certain areas, that's a harbinger of progress and transition," says Corbett. On a smaller scale, the big tip...is look for Starbucks going in." She says the coffee giant spends a lot of money on market research to determine new locations.
Trendy Establishments Are Popping Up: Development doesn't have to be going at all hours of the night for a neighborhood to qualify as a potential hot spot, but the quality of the new retailers and restaurants are important. They don't need to be the most expensive, but if they are concepts [wine bars, juice bars, organic or farm-to-table restaurants] that mimic those in flourishing neighborhoods, there is a good chance the neighborhood is on the rise," says Doug Breaker, president and CEO of HomeFinder.com.
The Neighborhood Is on the Cusp of a Metropolitan Area: Many homebuyers get priced out of metropolitan areas and will look for adjoining neighborhoods that are close to cities' amenities, but are considerably cheaper. Experts say this move is a great way to get in a neighborhood before it becomes overpriced. Corbett points to Miami as an example. That city started to rebound and is now very expensive. But just outside of Miami in Hollywood, Fla., homebuyers can get a home for a smaller price tag but still enjoy the perks of living near a major city.
Public transportation is also a big driver of growth in adjacent neighborhoods, adds Breaker. "If there is not an easy way for residents to commute, it will be difficult for the neighborhood to succeed," he says.
City Development Projects and Lower Crime Rates: One of the biggest signs that a neighborhood is on the rise is when crime is on the decline. "If the neighborhood is seeing increased crime it's not ready to transition yet," says Corbett. Many websites track neighborhood crime statistics, so look for improving stats to find hints of emerging areas.
In addition to declining crime rates, experts point to city development projects as a sign a neighborhood is in turnaround mode. City building efforts like gardens, fountains and public building façade projects are all good signs, says Breaker. "If the city is investing in projects that will contribute to the growth of the neighborhood... they are most likely preparing the neighborhood for a turnaround," he says.
For Sale Signs Are Going Up: Unkempt houses and boarded up windows are big red flags to buyers, nut if you can spot a couple of houses popping up that looked like they have been renovated (or flipped) it's a good indicator the neighborhood is set to grow. "If you see one or two houses that look like they've been redone spring up, it's a sign people are starting to come in and gentrify," says Corbett. "It's a great time to jump on the bandwagon."
Mortgage rates for 30-year fixed mortgages fell this week, with the current rate borrowers were quoted on Zillow Mortgage Marketplace at 4.11 percent, down from 4.18 percent at this same time last week. The 30-year fixed mortgage rate declined steadily last week, dropping to as low as 4.09 percent on Monday before rising slightly to today's rate. (See the complete chart below.)
"Rates drifted downwards last week as geopolitical concerns emerged from the turmoil in Ukraine," said Erin Lantz, director of mortgages at Zillow. "This week, while the jobs report on Friday is typically the dominant market catalyst, we expect rates will remain depressed while the situation in Ukraine remains unsettled."
Additionally, the 15-year fixed mortgage rate Tuesday was 3.08 percent and for 5/1 ARMs, the rate was 2.69 percent.