Construction Costs on the Rise?

Many people think it's cheaper and more cost effective to remodel the home they have rather than building a new home from scratch. This may or may not be the case depending on the repairs you make.

According to the National Association of Home Builders, this is how construction costs have changed over the past 6 years:

Framing and Trusses: $27,887 vs. $34,600

Insulation: $2,387 vs. $3,471

Drywall: $8,047 vs. $11,185

Stairs: $863 vs. $1,674

Tiles and Carpets: $6,506 vs. $11,058

Plumbing $8,229 vs. $11,753

Siding: $6,411 vs. $12,476

Exterior Door: $1,143 vs. $2,080

Foundation: $10,512 vs. $15,249

Cabinets and Countertops: $6.568 vs. $12,477

Electrical Wiring: $5,011 vs. $8,457

Windows: $4,966 vs. $6,322

Roof Shingles: $3,941 vs. $7,070

Total Construction Cost: $151,671 vs. $219,051

Keeping Your Living Arrangements Status Quo in This Housing Market

The housing market these days is under pressure. Foreclosure rates are on the rise and those trying to sell a home are experiencing great competition. If you've decided to wait out the market living in the same house, should it remain status quo for you?

What should you do if you're staying put?
There are many reasons why you may be staying in your home. If you're keeping your current home, does that mean you can just sit back, hold on to your real estate asset, and time the market so you can sell when it recovers? Not necessarily.

Take these steps into consideration to better your situation when it is time to sell.
1. Fix it, repair it. Take the time to make repairs and fix items that are broken in your home while you have a chance. This helps you to avoid scrambling later when it is time to sell.

2. Renovate. Some homes need remodeling from top to bottom while others need to be updated or spruced up a bit. It may mean applying a fresh coat of paint to each room, updating appliances or putting in a new floor--carpet, tile, or wood. Take the time to make these changes now. You can spread out the cost and time, so you don't have to do it all at once.

3. Make your home energy efficient. The demand for green and energy efficient homes is on the rise. Make your home more cost efficient for you, and eventually the new owner by making energy updates and upgrades such as replacing insulation, adding energy efficient light fixtures, and sealing cracks in window and door jambs.

It's a buyer's market, so this may not be the right time for you to sell. If you're staying put, try these three tactics to increase your odds for selling when the time comes.

Selling a Home in the Tough Housing Market

The housing market these days is under pressure. Foreclosure rates are on the rise and those trying to sell a home are experiencing great competition. So what do these hard economic times hold for those trying to sell their homes?

What should you do if you're trying to sell?
There are many reasons why you may be trying to unload your home, even if it is a buyer's market. Maybe your job transferred you to a new location, you're recently divorced, or you're downsizing after sending the last child off to college.

While each area of the country is experiencing difference sales times and sales prices, are there ways you can increase your chances of selling? Try these three tactics and your chance for selling goes up.

1. Make sure the price is right. What happened two years ago has nothing to do with today. Do some research on your own to find out what houses similar to yours are selling for in the area. There are some websites online where you can find sales price information. You can also enlist the help of a professional real estate agent. If you price your home for the current market, it will sell. If you price it too high or too low, then you may experience a delay.

2. Make it presentable. The better your house looks, the faster it'll sell. Buyers can't envision themselves living in your home if it is dirty, cluttered, or in need of major repairs. It's not a matter of remodeling the whole house, but it is a matter of making it look its best.

3. Offer a bonus. Whether it's offering to pay the buyer's closing costs or upgrading the appliances, offer a bonus incentive to get the attention of potential buyers.

It's a buyer's market, but this doesn't mean you can't sell a home in today's market. If it's time for you to move on from your current home, try these three tactics to increase your odds for selling--making it easier and faster.

Buying a Home in the Tough Housing Market

The housing market these days is under pressure. Foreclosure rates are on the rise and those trying to sell a home are experiencing great competition. It's definitely a buyer's market, which means for those who have good credit, it may be the perfect time to buy a home. Prices are lower and more affordable than they've been in years and interest rates are low--making it attractive to potential home buyers.

Do you have what it takes to buy?
There are three main things you need to buy a home in this market. If you can check off all three items, now may be the right time to buy a home.

1. Steady income. Lenders want to see that you have a steady source of income. They like to see consistency (or an increase) in your income for the past few years. They also like to see consistency in your employment--longevity with one employer or jobs within the same industry.

2. Good credit. Borrowers with a credit score of 750 or higher get the best interest rates and loan terms. Borrowers with credit scores above 700 still get decent rates. It's credit scores under 700 that are finding it tough to obtain mortgage financing.

3. Down payment. If you have 5 to 10 percent for a down payment, and a high credit score, you're ready to buy a home and obtain mortgage financing. Some lenders are requiring up to 20 percent.

What to do
If you fit the criteria, then you're prepared to be a home owner, but now what do you need to do?

1. Educate yourself. There are a multitude of websites where you can educate yourself on the real estate market. You can also turn to a professional real estate agent to help you locate homes that fit your criteria. They're also a wealth of information on the real estate process and mortgage financing. They can be invaluable to create a smooth transaction.

2. Be a realist. The amount you're approved for and what you can realistically afford are two different numbers. When a lender calculates the amount you can qualify for, they use your gross income, not what you take home. Also, they don't take all of your bills into consideration. So make sure that you can afford the mortgage payment, including the taxes and insurance on the property before you move forward.

3. Obtain a pre-qualification. Show the seller you're serious and ready to buy by getting pre-qualified. It can also give you negotiating power if you're up against another buyer that isn't pre-qualified.

It's a buyer's market so if you're interested in buying a home, now is the time. If you fit the criteria, now you know what you have to do.

Credit Scrutiny: What You Can Do to Make Yourself Look Worthy to Creditors

Nobody can dispute that the credit, mortgage, and loan environment is stricter than ever before--except maybe during The Great Depression. There is, however, light at the end of the tunnel. Don't get tunnel vision. Follow these five guidelines to make yourself look credit worthy.

1. Monitor your credit report
Once or twice a year, pull your credit report from all three credit agencies. Go over the reports with a fine tooth comb. Go line by line and mark items that are wrong, not yours, or you don't recognize. You can request your report directly from the three credit agencies, or request all three reports from one place such as www.annualcreditreport.com.

2. Dispute and correct errors
Dispute the incorrect items on your credit report directly to each agency where the error shows. The credit agencies conduct an investigation, which can last up to 30 days. They'll send you a notice as to whether or not the erroneous item is removed from your credit report.

3. Pay your bills on time
Your payment history makes up 35% of your credit score. This means it's imperative for you to pay your bills, and pay them before or on the due date.

4.Keep good records
When you apply for a mortgage or a loan, the lender wants to see the documentation that backs up what you're saying. Be sure to keep accurate records including copies of pay stubs, tax returns, W2s, bank and investment statements, etc.

5. Build your savings
With more mortgage lenders requiring higher down payments, build up your savings if you're planning on buying a home. Live frugally while trying to stockpile your savings. Living below your means for the time it takes you to sock away a 10 to 20 percent down payment is worth it in the long run.

There is no doubt that you're under more scrutiny than ever by creditors, lenders, and mortgage companies. The good news is that there are things you can do to make you look credit worthy when you're under the microscope.

Where Have the Zero Percent Credit Cards Gone?

In an ever changing credit environment, you're hard pressed to find a credit card company offering zero percent options. These offers haven't hit the endangered species or extinct list, but they are harder to come by. And even those who hold credit cards with favorable terms are seeing their credit card companies reduce their credit limits, raise interest rates, increase fees, and even close accounts that are idle.

New credit

New credit is still available, but it's harder to obtain. Obtaining a new credit card is coming down to one factor--your credit score. Those with scores over 700 are receiving the best deals and most favorable credit card terms. Those with scores below 700 are seeing higher interest rates and lower credit limits. Some aren't receiving approval at all.

How reduced credit limits and idle accounts can damage your credit score

The worst part about having a credit limit reduced is that it can affect your credit score. This is true of idle accounts that are closed by the credit card issuer as well. When your credit limit is reduced or an idle account is closed by the issuer, your debt-utilization ratio is affected. The debt-utilization ratio is the percentage of available revolving credit that you're using. As your credit limit is reduced, the debt-utilization ratio goes up, and higher debt-utilization ratios can decrease your credit score.

This can result in difficulty in obtaining new credit, and can create unfavorable interest rates and other terms for various types of credit and loans.

The solution: Make sure you use your credit cards at least twice a year. Then pay off the balance before the due date so you don't accrue interest. This'll help to keep your accounts from being closed for non-use, and ultimately help keep your credit score from plummeting.

So where have all the zero percent credit cards gone? There are some still floating around out there, but obtaining them is increasing in difficulty. Know what affects your credit score and make sure you do what you have to keep your credit score up--preferably above 700. With a good credit score, you'll see less of a change in your credit availability than those with scores below 700.

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