What Is Private Mortgage Insurance?

Many people, when purchasing their first home, do not have the 20% downpayment necessary to complete the sale. This 20% is necessary for the lender because it shows that the buyer has skin in the game and will not back out of their loan without losing a good deal of money. It is difficult for a first time home buyer because the buyer has not had a chance to build up equity in a previous home that they could then use for a downpayment in their next one. This is where Private Mortgage Insurance (PMI) comes into play.

Over 60 years ago, in 1957, the Mortgage Guaranty Insurance Corporation was founded as the first PMI company ever. It was the first competition available to the FHA market and allowed a new group of buyers to enter the housing market. This mortgage insurance allows the lender to underwrite loans even when the purchaser does not have the downpayment necessary. The PMI company uses these insurance payments to guarantee that the lender will not lose money on the sale and will pay the 20% downpayment if the buyer backs out.

The good thing about PMI is that it can be a temporary solution for the buyer while still allowing them to get into the home that they wanted. The buyer has the opportunity, as their home’s value rises along with the equity of the home, to refinance out of the PMI they initially purchased. Many lenders, once the 20% threshold is reached, will allow PMI to be taken out either through a refinance or sometimes even with a simple letter request. When this happens, the lender maintains the loan and the monthly payment for the purchaser decreases because PMI goes away.

While it is a fairly large monthly expense, without PMI there would be a lot more people renting houses and apartments. This monthly expense allows otherwise unqualified buyers to get into a home that they want and build equity rather than renting a home that builds equity for someone else. While it is not a perfect system because many people still default on their loans, it has worked for over 60 years and it has allowed more people to purchase homes that help them financially for the rest of their lives.

This article was originally published on JasonCohenPittsburgh.org

Tips To Help You Stage A Home

Most realtors recognize that staging a home can encourage buyers to put in an offer more quickly and even offer a higher price than they would on an unstaged home. Sellers can use these tricks to stage their homes without hiring a professional.

Prioritize

If you don’t have the time or money to stage your entire home, focus on the rooms that are the most important first. What are the most important rooms? The living room, followed by the master bedroom and kitchen. Other bedrooms, offices, basements, and family rooms are less important.

Remove About Half Your Furniture

Removing furniture is one way to make your home seem bigger and more appealing to buyers. Of course, some furniture can stay, such as the living room sofa and potentially a table. But if your furniture is past its heyday, you’ll want to remove it (you’ll learn what to do with it just below) and rent furniture, which you can use while showing your home.

Store Items Offsite

Clutter removal is one of the most important aspects of staging your home, but some people make the mistake of moving their mementos and knickknacks to closets or the basement. However, those are areas that potential buyers will be sure to check out. It’s smarter to rent a storage unit or cube to store those things while showing your home. Without clutter, your home will seem roomier, and buyers will be able to envision themselves and their belongings their, not just yours.

Float Furniture

A classic staging trick is known as floating furniture. Pull your furniture a few inches away from the walls and anchor it with an area rug. Remember that this rug should be large enough that all of your furniture can comfortably fit on it. Floating furniture makes the room look big while creating a cozy space for living.

Brighten It Up

Any room looks more appealing when bright. Open all your blinds and curtains and turn on every light in the home, even those in bathrooms and closets. Consider cleaning or replacing lampshades and dusting lightbulbs and fixtures to produce the most light as well.

Of course, you shouldn’t forget about your home’s curb appeal either when it comes time to sell.

This article was originally published on JasonCohenPittsburgh.org

Tips To Help You Boost The Value Of Your Home

Whether a house is recently purchased or has been lived in for a while, the fastest way to increase its value is with a plan. Upgrades made intentionally rather than on impulse are more effective overall. Start slowly, making a list and prioritizing. Do research or talk to realtors after the plan is formulated so that the return on these improvements can be discovered. Some improvements add more to a home’s value than others.

Redo the Kitchen

Buyers of all sorts have focused on the kitchen for a long time and it still holds sway over the most recent wave of new homeowners. A new suite of appliances, a new countertop, and fresh flooring, all result in a new look that is coordinated and invigorated from its past incarnation. A fresh coat of paint on cabinets or walls, with updated hardware, also breathes new life into a kitchen.

Enliven Floor Plans

Millennials wanted an updated kitchen first and foremost; an open floor plan that featured flexible living space was only second on their list of desired features. One means of adding usable square footage is by finishing a basement. Attic conversions are also an option. It is important to remember that a basement can cost between $10,000 and about $27,000 to convert, depending on its size, while an average attic conversion cost almost twice that.

Lower Energy Costs

Saving money currently and making more when selling the house down the line is always desirable, and this is achieved by lowering the home’s energy costs. Younger buyers look for R-Values on insulation and for windows that have low-E coatings, both of which are effective efficiency measures. Water heating is also important, as it accounts for 15% of a typical home’s energy costs.

Clean Things Up

While many means of boosting a home’s value involve redoing rooms and repurposing spaces, a simple step that can be overlooked is simply making things look fresh and new through a thorough cleaning. Wash the house, its windows, its walks and driveway, and its fence if there is one. Add fresh paint where necessary. Especially if a home is going on the market, making it look clean is a relatively easy means of increasing curb appeal.

This article was originally published on JasonCohenPittsburgh.net