Author: Joseph Bell

Filed under: Buying

By MOVING.TIPS

Once all the moving preparations have been made, all the arduous moving tasks have been taken care of, and everything has gone more or less according to plan on moving day, you finally find yourself in your new home, surrounded by piles of boxes, tired and glad that your relocation is about to end.

To fully complete your moving adventure, however, you need to unpack your belongings and make your new place feel like home. But how to even begin unpacking?

First things first

No matter how much you want to get it over with as soon as possible, there are several important things to do before you can actually start unpacking.

• Clean and prepare your new home. It’s easier to wipe down shelves, clean windows, and mop floors before your belongings have been put in place. Make sure your home-to-be is spotless when your items arrive. If you can’t get to your new place early enough to do a thorough cleaning, consider hiring professional cleaners to do the job for you.
• Inspect and organize your belongings. Check all the delivered boxes and household items against your inventory sheet to make sure nothing is damaged or missing. Then have each of your possessions taken to the room where it belongs. If everything was properly marked and labeled, sorting out your items will be a piece of cake.
• Open your box of essentials. There should be tools, toiletries, clothes, medicines, packed food, basic kitchenware, and other “lifesavers” in it that will allow you to refresh yourself, open the sealed boxes, reassemble your furniture, and so on.
• Set major furniture and appliances. Position your large furniture pieces and bulky household appliances first. Then you can put any smaller items you unpack later directly in their rightful places. Plan your interior design well in advance so you don’t end up moving heavy pieces around several times.

Tackle the necessities

What matters most when unpacking your items after a move is ensuring that your essentials are immediately accessible. So prioritize your belongings, and unpack only the necessities first.

Bedding

You may not be able to unpack the entire bedroom right away, but you will definitely have to set up the bed the day you move into your new home. Reassemble it (if necessary), lay down the sheets, unpack the pillows, and spread the blankets so you can get a good night’s rest – you’re going to need it!

Provided that you have a change of clothes and some comfortable indoor shoes (as well as curtains on the windows to ensure your privacy), the rest of your bedroom items can wait until you find the time and the energy to deal with them.

Bathroom items

Without a doubt, your personal care items, toiletries, and medicines should top the list of the most important items to unpack after your move. Put out toilet paper and soap, find your toothbrush and toothpaste, hang the towels and the shower curtains, and unpack any other bathroom essentials you’re going to need in order to refresh yourself and wash away the weariness and stress of moving.

Also, fill in the medicine cabinet with the medications you have brought, and don’t forget to take your prescription drugs on time.

Kitchen necessities

You may have brought some food with you, or you may rely on delivery for the first day or two after the relocation, but you’re going to need a fully operational kitchen as soon as possible in order to prepare healthy, homemade meals for yourself and your family.

Kitchens tend to take a very long time to unpack and organize properly due to the large number of items that need to be sorted out and carefully arranged.

As soon as you’ve hooked up the large appliances, such as the fridge and the stove, move on to your smaller kitchenware. Plates, silverware and glasses should be the first to find their places in cupboards and kitchen cabinets, closely followed by cooking utensils, pots and pans, and pantry items.

Kids’ and pets’ items

If you have young children, you should unpack some of their favorite toys, books, games, blankets and such during the very first hours in your new home. Keeping your young ones happy and occupied will let you concentrate on your work and finish it faster.

Of course, you should also take care of your pets’ needs immediately upon arrival. It’s a good idea to pack adequate pet food, water and food dishes, and some of your animal friends’ favorite toys in your open-first box.

Finishing up

When you’ve unpacked the three most essential rooms in your home (bedroom, bathroom and kitchen), everything else can wait a bit. There are no deadlines to meet, so you can set your own pace when unpacking and decorating your new place – just unpack in order of priority and without procrastination.

If you stay organized, set reasonable mini goals and complete them promptly, clean after every unpacking phase, and dispose of the packing materials in a safe and eco-friendly manner, your new surroundings will soon stop looking like a warehouse full of boxes and start feeling like home.

If you have some fun in the process – listen to your favorite music, play “unpacking games” with your kids, and invite friends over to give you a helping hand – the exhausting unpacking endeavor may turn out to be much easier and faster than you expected.

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Filed under: Buying, Celebrity Homes, Selling

By Melissa Allison

The Napa Valley estate that beloved funnyman Robin Williams built in 2003 and tried to sell before his untimely death in 2014 has finally sold for $18.1 million.

Williams initially asked $35 million for the 639-acre vineyard property, whose 20,000-square-foot main home he dubbed Villa Sorriso, or Villa of Smiles. The home has been on and off the market since 2012, with multiple price cuts.

Inspired by the Palladian architectural style of the 1700s, the villa boasts five bedrooms, eight baths, a library, pool room, elevator, and a luxurious screening room worthy of an Oscar and Golden Globe winner.

Examples of the home’s elite craftsmanship include an imported Portuguese limestone exterior and continue inside with gold leaf and verdigris ceilings in the library and master suite, oak panels with mother-of-pearl inlays, and mosaic glass tile rotundas.

Villa Sorriso offers climate-controlled wine cellars and a viewing tower for taking in the acreage and its spring-fed pond, tennis court, hiking trails, horse barn, olive orchard and vineyards.

Antique European stone terraces overlook the grounds, which include a 65-foot infinity edge swimming pool with a wading pool and spa. There’s also a 3,200-square-foot guest house.

The listing agents were Joyce Rey and Cyd Greer of Coldwell Banker Previews International. The buyers are French winemakers from Chateau Pontet-Canet, according to The Wall Street Journal.

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Filed under: Buying, MyNextMove

By Jen Juneau

Take a deep breath and ask yourself: Has the time come to relocate?

Moving isn’t anyone’s favorite thing to do. Aside from the physical process of shifting everything you own into a new space and/or paying people to do so, there are many other factors to consider, such as budget, location, and (perhaps most importantly) your sanity. But the challenges are worth the struggle if you’ve reached the point where relocation truly is best for you.

If you’re on the fence about moving, start 2016 by perusing these 16 signs that it’s time to take the plunge and start a new house search.

1. One word: money.

Yes, it’s an obvious point, but examining expenses is a task that shouldn’t be overlooked when you’re considering a move. Sure, you might be able to upgrade your current home to fit your future needs — but will you see a return on investment when it’s time to sell? Now is the time to examine your finances and figure out if you should continue to save some cash to boost your down payment or explore financing for that upgraded master bathroom you’ve been dying to take on.

2. You’ve outgrown your storage space.

There’s only so much Pinterest-surfing you can do for inspiration on reorganizing your kitchen and clearing out the clutter before you start to realize that your current space isn’t working for you anymore. If more cabinets will make your life easier, so be it. It’s up to you whether that means a remodel or a new kitchen in a new house.

3. Your family is expanding.

If you’re adding a couple of kids and/or pets to your brood, upgrading your home is a logical next step. Aside from needing more space, aspects you may have overlooked before — like A-rated school districts and that sweet neighborhood park — may be suddenly appealing. Don’t have kids? This rule still applies, since buying a house in a great school district is a big plus when it’s time to sell.

4. The kids/roommates are gone.

In the opposite vein, don’t waste money on space you don’t need. If it’s just you and your honey now, why not downsize to a smaller house or studio apartment to save not only on your mortgage but also on utilities, repairs, cleaning time, and more?

5. Your neighborhood is on the decline.

If the crime rates in your neighborhood are headed in the wrong direction, it might be a good idea to move — quickly — before it gets even harder to rent or sell your place to someone else. There’s no shame in wanting to make your nest in a home where you feel safe and secure.

6. You have a dream your current place won’t support.

Whether you envision a home dressed to the nines with luxurious upgrades or one with an extra room you can dedicate to home brewing (hey, whatever floats your boat), it might be a sign that you’re ready to move on.

7. Your city isn’t as appealing to future buyers as it once was.

Every trendy city has its moment. If yours is one of those whose popularity is steadily declining, selling now rather than later could save you a lot of cash (and heartache) down the line.

8. It would cost you less to move than to keep repairing your current place.

It can be hard to admit when it’s time to throw in the towel on repairs, especially if you’ve put a lot of hard DIY work into your beloved abode. But it might be time to take a step back and think about how nice it would be on your stress levels and wallet if you could start fresh.

9. You’ve started cooking at home more (or less).

If you never have time to cook anymore — and don’t see that trend slowing down any time soon — downsizing to a home with a smaller (or less fancy) kitchen could be worth the cost of moving. On the flip side, if a lifestyle change means you’re at home more (and spending more time honing your knife skills), a larger, upgraded kitchen could be a great thing to focus on during your home search.

10. Your kids have stopped inviting their friends over.

Is your kid always like, “BRB, Mom, I’m going to Johnny’s,” but Johnny never comes to hang out at your place? Sounds silly, but it might be time to face the fact that since it has more room to roam, Johnny’s house is just a more comfortable hangout spot (or his fridge is extremely well-stocked). If your kids seem hesitant to invite friends over because there is nowhere to play or no space to work on that group project together, you might want to rethink your housing priorities and start the house search (and bump a refinished basement or big backyard to the top of your list).

11. You’re intimidated by the thought of rising interest rates.

If you bought your current house when interest rates were at their rock bottom and before housing prices started to rise, you might be reluctant to give up that amazingly low mortgage payment — even if you really need a square footage upgrade. And while it’s true that even a small increase in mortgage rates can have an impact on your bottom line, the reality is that you can’t control all the factors. So if you’ve outgrown or just aren’t happy with your current home, there’s no reason not to at least explore your options. You might be surprised at what you can afford if you’ve built up enough equity in your current home.

12. You’ve been putting off moving for a while.

Similarly, if you’ve been meaning to put your house on the market but have a lot of work to do to prep your home for sale — or are just dreading the home-selling process — now is the time. While interest rates aren’t rising too rapidly, they are rising. So if you’ve been waiting for the push to get started, this might be it.

13. You just don’t jibe with your neighborhood anymore.

Still living in your old college town? Is the nearest grocery store (what feels like) a thousand miles away? Ask yourself whether your current living situation fits your lifestyle. If the answer is “no,” it’s time to figure out what you want in a neighborhood and move forward.

14. Your office commute is the bane of your existence.

Commuting to and from the office can take hours out of your week. Just think, you could be doing much more important things — such as binge-watching Netflix (or just not wasting huge amounts of gas and time in hours of stop-and-go traffic). Whether you’re starting a new job or keeping your current one, moving closer to work has a lot of benefits.

15. Things are getting serious with that special someone.

Having a new love doesn’t necessarily mean it’s suddenly time to pack up and move in. But purchasing a new place together can be spatially, emotionally, and financially rewarding.

16. A fresh start sounds like just the ticket.

Sometimes, life deals us cards akin to flashing neon signs saying, “GO FORTH AND START ANEW.” If you feel that tug in your heart and are in a place financially to do it, don’t hesitate. You only live once, and life’s too short not to experience it fully.

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Filed under: How To, Lifestyle

By Kendal Perez

Amid the typical New Year’s resolutions, getting organized is an oft-promised, seldom-achieved goal that plagues busy parents, office workers, college students and everyone in between. Clutter and a messy environment are proven causes of distraction and increased stress levels, both of which prohibit creativity and productivity. Despite our best efforts, staying organized is a big challenge when life gets hectic and tossing our belongings wherever they fall trumps storing them where they belong (assuming they have a designated home at all).

Those seeking a more streamlined lifestyle this year are likely influenced by the rise of the minimalist movement, the allure of tiny houses and the surprising popularity of such texts as Marie Kondo’s bestseller, “The Life-Changing Magic of Tidying Up.” These trends are not simply strategies for enhanced organization; they’re lifestyles that espouse a more intentional approach to living. Underlying the need to be organized, after all, is a desire for more control.

“Organizing is about making decisions,” says Alison Kero, owner of ACK Organizing in New York City, adding that it’s ultimately about wanting the best for yourself. Consider these steps toward a more organized and intentional life in 2016:

Toss or Donate

Decluttering is a natural first step in getting organized, but experts agree tossing things you don’t want isn’t just about making space for more stuff. “It’s more about becoming aware of what you’re choosing to bring into your life and making a decision to keep it or let it go based on what’s best for you and what you really like,” Kero says. Practically speaking, it’s best to group like items together before you start purging so you can easily identify duplicates and keep your favorites.

“Start by doing an initial sort,” says Sandra Schustack, owner of Clear Your Space East in Manhattan and New York Chapter Board Director for the National Association of Professional Organizers. “Only keep what you use and love; the rest is taking up precious space.”

The idea of your space being “precious” or valuable is key to keeping sentimentality from sabotaging this process. “If you don’t love it, need it, or use it, then it doesn’t deserve a place in your home,” says Janet Bernstein, Certified Professional Organizer and owner of The Organizing Professionals, LLC, in Philadelphia. “I keep my clients focused on this mantra as we’re decluttering,” she says. “It speeds up the process when you’re forced to categorize your possessions in this way.”

Experts also note that getting organized takes time, so don’t expect overnight results. Remove items room by room, starting with the area that bothers you most. That way, you can carry the sense of accomplishment you feel in tackling that room to others throughout your space.

Find a Home for Everything

Putting back items you’ve decided to keep is not as simple as tossing them into a storage container. In fact, rows of clear plastic bins with expertly-applied labels simply disguise chaos as order, and don’t provide for long-term organization.

“The reason so many people find it hard to stay organized is that they do it once, dismantle it when they need something stored at the bottom of the bin, and then don’t have the energy to put it all back together again,” says Holly Rollins, minimalist and blogger at HollyLaurel.com. Instead, determine the proper home for items based on when and where you need them, so access and storage are both intuitive and practical. Moreover, continue the “like with like” grouping strategy you employed during the decluttering process so you always know where to find (and store) batteries, light bulbs and even important documents.

Keep Functionality in Mind

Most experts agree storage containers are worthy investments, but purchasing these items before deciding how they’ll be used is a waste of money. “I see far too many potential clients purchase organizing products believing these items will solve their clutter woes,” Bernstein says. “What they don’t realize is they’re putting the cart before the horse.”

Placing all your cosmetics in a decorative box under your bathroom cabinet may be tidy, but it’s neither functional nor sustainable. Since you use these items frequently, they will likely end up strewn about drawers and countertops more often than tucked behind cabinet doors. Instead, organize your makeup by type within the top drawer of your vanity for easy access. “Get some shallow square and rectangular trays from the dollar store,” suggests Alison Warner, owner of Prepped to Organize, LLC, in Chester County, Pennsylvania. “Stick Velcro tabs on the bottom of each tray to adhere them to the drawer. No more rolling items every time you open the drawer!”

This strategy can be applied elsewhere in your home, including the “junk” drawer in your kitchen or the utility cabinet in your garage. The trick is to organize spaces well enough that replacing items once you’ve used them becomes habit.

Maintain Organization

It doesn’t matter how organized you become; the moment you start to accumulate more stuff, you’ll be surrounded by the very clutter you sought to eliminate in the first place. Before you buy anything new, remember the criterion you used during the decluttering phase. “Keep only what you use, what you love, and what you need,” Rollins says. “If you make and keep this promise to yourself, you’ll never have organization problems again.”

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Filed under: Buying, How To

By Devon Thorsby

A disagreement between neighbors can escalate quickly. One minute you’re mowing your lawn, the next you’re plotting revenge on the homeowner next to you for parking his car on your freshly cut grass.

“You hear about neighbors chasing each other down with spades and all sorts of weird things,” notes Nick Hall, director of the Dispute Resolution Center of Harris County, Texas, which offers mediation for civil disputes, including neighborhood problems.

It doesn’t serve you well to pick a fight with the people who live on the properties surrounding yours, and especially not when you’ve just moved in. But it can be all too easy to start off on the wrong foot with a neighbor, and it can haunt you for years to come. (Another strategy: Check out the neighbors before you buy the house.)

While you don’t have to be the next Lucy and Ethel, you and your neighbors should be able to get along amicably enough to avoid major disagreements when it comes to what you each do with your properties. Follow a few simple guidelines to get on your neighbor’s good side from the start.

Introduce Yourself

You’re not required to bring a casserole, but a knock on the door and friendly handshake will go a long way. It’s harder for your neighbors to make assumptions about you when you approach them with a friendly greeting — and it’s not as easy for them to hate you when they think you’re just so darn sweet.

“Don’t have the first contact with your neighbors be when you need something, or when you have a complaint,” says Stuart Watson, a staff mediator at Resolutions Northwest, a center for dispute resolution in Portland, Oregon. “Build some kind of relationship first, so that when you do want to remodel your garage into a spare rec room … you’re not coming up to somebody you don’t know with demands.”

If you’re moving into a community with a homeowners association or other kind of neighborhood group, Hall says it’s a good idea to attend the first meeting you can and start the relationships early. You can even go as far as offering to organize a community event. “Everyone likes potlucks, so why not do a block party or a street party and invite everyone?” Hall says.

Know the Rules

Everyone wants to think they’re right, but before you do anything to your property, be sure you’re following the neighborhood or municipal rules when it comes to construction, noise and other hot buttons for cranky neighbors.

Reading up on the community’s regulations should happen even before you buy the property, says Brad Aldrich, senior attorney at Aldrich Legal Services in Plymouth, Michigan, who specializes in real estate law, among other areas. Especially if the home you’re buying is part of a homeowners or condo association, be sure any construction or landscaping you do on your property doesn’t put you in the wrong.

“Forget bothering your neighbor — if you wanted to put in a pool, but for whatever reason your local homeowners association didn’t allow pools … you’re not going to be able to put one in,” Aldrich says.

Being familiar with regulations and local ordinances, like setback requirements from the property line for any structures, could help you know if your neighbor is infringing on the rules as well.

“We get a lot of people call in and say, ‘I’ve never owned a home before, and I don’t know if my neighbor is doing something wrong,'” Aldrich says, adding that familiarity with regulations can help you avoid speculation, so any issues are based on fact and written rules or laws.

Let Them Know of Any Changes

Whether you’re planning to redo the landscaping or put an addition on the back of your home, it’s a courtesy to give your neighbors advance warning of any construction on your property.

Renee Bove, a staff mediator with Watson at Resolutions Northwest, says many of the neighbor disputes that come to mediation reach a heightened level simply because one person didn’t communicate well with the other. “Oftentimes, it’s just a simple misunderstanding that somebody had a pretty good intention that kind of backfired and had a negative impact. And they don’t talk about it, so it takes a life of its own,” Bove says.

For example, warning that you plan to put up a tall fence because your dog can jump high will probably go over better than erecting a privacy fence without any notice.

If it Would Bother You, Don’t Do It

The rule of treating others the way you want to be treated still applies as a homeowner. If you keep your neighbors in mind when you make decisions, you’re far less likely to tick them off.

An example: You don’t want excess water runoff on your property, so don’t assume your neighbor will think any differently if you direct your drain pipes at his foundation. Yet, Aldrich says water runoff is a common cause of neighbor disputes.

“If the natural topography of the land is that water runs off into an adjacent property, that’s really not the other property owner’s fault — it’s just the way the land is,” Aldrich says. “But if that property owner were to put in a sump pump and then route the water line to where it dumps directly on the neighbor’s property, well then, that is an act of the one property owner where it does negatively impact the neighbor,” Aldrich says.

In Portland, Bove says a growing topic of dispute involves using a home for Airbnb stays, whether it’s the whole house or individual rooms. The new home rental trend “just brings a lot more traffic and new people into a neighborhood that can be disconcerting for other neighbors,” Bove explains.

It can be useful to have a conversation with your neighbors before listing your home for rent, and, ensure you are not infringing on any laws, guidelines or regulations.

Count to 10

Being a good neighbor doesn’t mean you have to let everyone walk all over you (or your land). If you believe your neighbor is encroaching on your property or your ability to live peacefully, you shouldn’t have to suffer.

But keep in mind, people have a tendency to dig in their heels when they feel their property is being threatened, so it’s best to tread lightly when addressing issues.

“If you give someone a ticket, or if you go to court or to trial of some kind, you’re going to make even bigger enemies of the neighbors,” Hall says. “And yet, [you’re] going to have to continue living together in the same neighborhood.”

Bove uses the example of a homeowner parking a few inches in front of a neighbor’s driveway during a personal emergency. Seeing the car blocking part of the driveway, but not knowing why, the neighbor assumes it is an intentional slight.

“They just didn’t take a moment to come from a place of curiosity: ‘Hey, I noticed your car was in my driveway a little bit. What was happening for you?'” Bove says.

In the event you simply can’t resolve a problem on your own, mediation is often an effective way to ensure both parties are heard, and put some rules down without taking it all the way to court.

Watson estimates mediation through Resolutions Northwest resolves about 80 percent of the disputes brought to them, with a solution made that day. But the number of parties that come out of mediation feeling it was a positive experience is even higher, he says. “Even in those more rare times when they don’t come to some kind of agreement, it was helpful for them to be able to have a discussion and to feel their concerns were heard.”

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Filed under: Selling

By Laura Agadoni

When it comes to timing your home sale, predicting the real estate market can seem impossible. Even psychics don’t always know what the future holds for real estate. But you can make some predictions based on what’s happened in past real estate cycles.

For starters, 2016 is an election year. There’s also talk of interest rates potentially rising even higher than the quarter-point hike that went into effect in December, the first such rate increase since 2006. Your strategies for selling, because of those issues and more, might differ this year.

Here are six clever tips to learn how to sell a house fast and to help your home sell quickly in 2016.

1. Price the home right.

If you ask two real estate agents whether you should underprice or overprice your home for sale, you might get opposite responses. The overprice camp believes you can get more money by asking for more money.

The underprice side believes you’ll pique the interest of more potential buyers by asking less than the price that comparable properties fetch. That could start a bidding war, which could drive the price back up.

“I am a huge proponent of underpricing just ever so slightly,” says Brett Miles, an agent with Douglas Elliman in New York. “Buyers are extremely savvy these days and watch the market like hawks. They are well aware of the bloated asking prices we are experiencing currently.”

Sellers have been “successfully pushing the envelope on ask for three-plus years,” says James Brune, also an agent with Douglas Elliman in New York. “But prices are plateauing now,” he says. “Sellers will need to be realistic and price at or below current market to get maximum interest [in their home].”

2. Finance the sale yourself.

Federal Reserve officials are calling for a gradual rate increase over time. The federal funds rate has been 0 percent for years. The recent December increase brings the rate to 0.25%. The next increase will bring it to 0.5 percent, and there could be more increases after that. “If mortgage rates [keep rising], this will begin to affect affordability across the board,” says Brune.

One way to help a potential buyer afford to buy your home if interest rates rise is to “offer to finance the purchase; be the bank,” says Miles. If you finance the deal, you can make the monthly payments work for your buyer by offering a lower interest rate than they could get from a traditional mortgage lender.

3. Stage your home.

It’s always a good idea to present your home in the best light possible before a sale, and doing so becomes even more important during a buyer’s market.

If buyers believe election results “will affect their pocketbooks directly, they may wait to buy,” says Miles. The same happens with increased interest rates. “People sit where they are [instead of buying],” says Jessica Dolan, a Pennsylvania home stager. “Therefore, it becomes a buyer’s market, and sellers will really need to make their properties shine through.”

Dolan suggests some tips and tricks, many of which won’t cost you anything, except a little elbow grease:

4. Prepare for El Niño.

The topic of weather is more than just small talk when it comes to selling your home. Extreme weather conditions, such as more rain from El Niño, for example, play a role. And El Niño is likely to be a factor during winter and early spring 2016, according to the National Oceanic and Atmospheric Administration.

“It may seem strange that a weather event could have an impact on home sales, but knowing that weather is coming can be a deciding factor for purchasing older homes, fixer-uppers, and anything with a roofing, foundation, or plumbing problem,” says Alexander Ruggie of 911 Restoration.

But there are ways to make your home more marketable during El Niño conditions, says Ruggie:

You can also appeal to environmentally conscious buyers by installing a water catchment system to harvest rainwater from El Niño.

5. Time the sale.

Springtime and early summer are traditionally good times to put your house on the market for a quick sale. And this becomes even more important in 2016 since it’s an election year.

“Election years mean uncertainty to a housing market,” says Mike Minihan, a real estate agent in Atlanta. “If you are concerned that the election could potentially throw a wrench in the market, [spring and early summer] will be early enough in the year to get the house sold before wild speculation starts breeding fear in homebuyers.”

6. Target millennials.

It’s a safe bet that when you sell your home in 2016, your target market will be millennials, people between the ages of 18 and 34.

“Baby boomers will start to cash out of their houses, which will put more houses on the market,” says Sam Heskel, CEO of Nadlan Valuation, a New York City appraisal company. An increased inventory of homes combined with an improving job market “will enable more millennials to become homebuyers.”

Millennials tend to like backyard decks, gourmet kitchens, open floor plans, balconies with views, and vegetable gardens. If your home has any of those amenities, feature them in your marketing.

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Filed under: Buying, Financing, Refinancing

By Geoff Williams

If you’re buying a house soon, you may be mulling over the idea of getting an adjustable-rate mortgage. Or you were, until you heard about the Federal Reserve’s recent decision to raise interest rates a quarter point. That likely put a chill on many homeowners’ desires to have an adjustable-rate mortgage, also known as an ARM.

If you currently have an ARM, you might be in full-blown-panic mode, wondering if your interest rate is going to climb soon.

“My voicemail and email has been inundated by my clients, friends and partners all asking the same question, ‘What should I do about my ARM mortgage and when?'” says Drew Grandi, a loan originator with Wintrust Mortgage in Massachusetts.

What should you do? It really depends. An ARM can be a terrific strategy for paying a mortgage, or a terrible one. Before you get one, or get rid of one, you need to think about how you want to proceed.

What Is an ARM?

It’s a home loan with a fixed interest rate, usually for five years — but after that, it can adjust every year. (That’s why you’ll often hear ARMs referred to as a 5/1 ARM, although you could have a fixed interest rate for a different period, like a 7/1 ARM or 10/1 ARM.)

After those five or more years are up, the interest rate can go up or down for the duration of your mortgage.

Because the interest rate could go up, it can be risky to have an adjustable rate. Nobody wants an ARM to cost them an arm and a leg.

So why get an ARM if your monthly mortgage payment can turn on you like that? Because the fixed rate for those five years or so is lower than a traditional fixed mortgage rate. It hasn’t been all that much lower in recent years, of course, since all mortgage rates have been low. Still, even a percentage point can reduce a mortgage payment enough to save a homeowner thousands of dollars in the long run.

How High Can an ARM Go?

While your monthly mortgage payment can adjust every year to a higher and higher rate, there is a limit to how much financial pain you’ll endure.

“There are protective caps, so the loan cannot adjust higher than the designated annual cap or lifetime overall rate cap,” says Staci Titsworth, regional manager of PNC Mortgage in Pittsburgh. This is looked upon as insurance against risk.

“Most ARMs are capped so that your interest rate will not exceed more than 5 percent above your original rate,” Grandi says.

That doesn’t sound so bad, but it can add up. Grandi offers an example of the homeowner who has a 5/1 ARM at 3 percent on a $300,000 mortgage. That would mean you’re paying $1,264.81 a month for the first five years, he says. If interest rates shot up, the most you would pay is 8 percent on that $300,000, which would mean a max monthly payment of $2,201.29, or about $936 more than your original payment.

If you are thinking about an ARM, Titsworth suggests having the loan officer run a few examples of payments, including the worst-case-scenario payment. It may be eye-opening.

What if You Have an ARM Now?

Don’t panic, Grandi says. “Everyone currently in an ARM should not necessarily be hounding their mortgage expert to refinance into a fixed-rate mortgage,” he says.

In fact, if you have a low-rate ARM now and you refinance into a 30-year fixed-rate mortgage, you’d likely pay around 4 percent and your monthly payment would jump a little. With that previous $300,000 ARM example, Grandi says, the homeowner’s payment would go up less than $200 a month.

That may well be worth it to have the comfort of knowing you have a fixed mortgage payment. But if you’re planning to move in the next couple of years, you’re probably better off keeping the ARM. That’s because one of the biggest factors in whether you should get an ARM is how long you plan to live in your house. Generally, if you’re going to live in your home for a short time before selling it, an ARM is considered a financially shrewd move.

“I’m a big believer in ARM loans and have one now,” Titsworth says. “Adjustable rate mortgages are a good option for consumers that have a shorter-term need, and also those that are comfortable with a little risk,” she adds.

Who Shouldn’t Get an ARM?

Do what you want, but if you’d like some general rules of thumb, there are three types of homeowners who should likely avoid an ARM.

— First-time homebuyers. Ali Vafai, president of The Money Source, a national correspondent lender and mortgage loan servicer on New York’s Long Island, says first-time homebuyers or those with little down payment should not choose ARM loans. Since rates are near historic lows today, he says it’s very likely rates will be higher in five years and payments would increase after the fixed period. Even if you’re not planning to stay very long, maybe you’ll discover you hate moving and and realize you don’t want to go anywhere.

— People on a tight budget. So you scraped up your down payment, barely, and you figure you can afford to live in a house if you pare back your budget a bit. It sure doesn’t sound like you would do well if, in five years, your monthly mortgage payment shot up a couple hundred dollars a month.

— Natural-born worriers. As has been duly noted, ARMs are a risk. Before you get an ARM, ask yourself some risk-related questions, Grandi suggests.

For instance, when you’ve been living in your home for two years, will you suddenly have sleepless nights because you aren’t sure what your mortgage payment will be in three years?

“Do you expect continued doom and gloom for the United States’ economy with unemployment increasing and inflation staying low?” Grandi asks.

In other words, if you a worrier, the ARM is probably not for you.

Titsworth agrees. She loves the ARM, though, and points out what isn’t often emphasized: When your fixed rate ends and it adjusts, your monthly payment doesn’t necessarily have to go higher. “It’s possible the rate could drop,” she says.

Still, all in all, “ARM loans are typically not the product of choice for someone that believes they will be in their home long term and wants [the] peace of mind of knowing what their payment will be,” Titsworth says. “The long-term fixed rates come with less risk and therefore a higher rate.”

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Filed under: Buying, Financing, Refinancing

By Devon Thorsby

The Federal Reserve announced Wednesday that interest rates would increase by 0.25 percent, or 25 basis points.

The last time the Fed raised rates, “the iPhone didn’t even exist,” says Mark Fleming, chief economist for title insurance company First American Financial Corporation.

Interest rates in the U.S. have been close to zero for the last seven years, intentionally kept low to allow employment and the market to recover from the crash in 2008.

For new homebuyers, the expectation of a rate hike spurred many to buy in the months leading up to the decision and encouraged a cycle of refinancing from existing homeowners.

But the moderate rate increase does not spell doom if you’re looking to buy a home — in fact, it may give you the push you need to get out there and buy your home before interest rates rise again, something economists are predicting for 2016.

How will rising interest rates affect you as a homebuyer? U.S. News asked experts to weigh in on whether you should be concerned about your ability to afford a mortgage and what you should know about interest rates in the next year.

The Fed’s decision doesn’t affect your interest rate as much as you may think. While the interest rate policy changes will affect how interest rates are offered, mortgage rates function separately, and are in fact far more volatile than the Fed’s interest rate.

Jonathan Smoke, chief economist for realtor.com, explains rates for new fixed mortgages not only fluctuate on their own, but have changed in anticipation of increased Fed interest rates, without any actual change in policy.

“When you look at the volatility of what rates have done around the ‘what is the Fed going to do’ all year long, we’ve had enormous movement in mortgage rates,” Smoke says. “We’ve had roughly 70 basis points of movement in the 30-year [fixed-rate mortgage] alone in the last 12 months when the Fed hasn’t done anything.”

Rising interest rates don’t mean you can’t find a mortgage that works for you. The rate hike by the Fed is minor and isn’t likely to squeeze too many consumers out of being able to buy a home. You might have to reconfigure what you put down versus what you pay monthly but as Smoke emphasizes, mortgage rates differ from day to day and lender to lender.

“It’s like buying gasoline — it’s different by provider, it’s different one street to the next,” Smoke says.

Higher interest rates can give the push you need. Many economists are expecting interest rates to continue to increase throughout the next year by a total of 1 percent, and while they are small, steady increases, getting a mortgage on the lower end is always a better idea than waiting and paying more.

Steve Rick, chief economist for CUNA Mutual Group, which builds financial products for credit unions nationwide, says that extra push to get homebuyers and other consumers moving in the market could serve as an additional stimulus for the economy.

“We could see faster economic growth next year because the Fed is raising rates, because it will help with confidence, and it will help with people trying to get ahead of the rising rate environment,” Rick says.

Increased rates can help keep home appreciation in line with wage increases. As housing markets continue to recover from the recession, home values have been appreciating rapidly, outpacing wage increases and making it more difficult for everyone to afford them.

“When you raise rates, you slow down the pace of house price appreciation,” Fleming says, noting mortgage rates will go up regardless of the Fed’s decision. By slowing the increase of home prices, the same people who could afford a house today will likely be able to afford the same house down the line, without being edged out by rapid property appreciation.

But at the moment, Rick notes, “housing is still relatively affordable,” and after such a long period of no interest rate changes, the Fed’s decision to increase rates by 0.25 percent isn’t going to stop people from making big purchases such as cars or homes with financing.

If you already own a home, you likely don’t have to worry about adjustable-rate mortgages. Because chances are you don’t have one. “The majority of mortgages that were taken out in the last couple years were 30-year fixed mortgages,” says Svenja Gudell, chief economist for Zillow. “We’re talking 85 to 90 percent of originations.”

Gudell notes many homebuyers are overinsured with a 30-year fixed rate mortgage — because the chances they’ll stay in one home for 30 years are slim — but many are not willing to take the risk of facing higher rates down the line in the wake of the subprime mortgage crisis.

But if you get an ARM, you don’t need to be scared. ARMs typically have a locked interest rate between five and seven years, so your interest rate is unaffected as long as you’re in that period. But even if you are in the floating rate part of your mortgage, Gudell and Fleming agree that rate hikes down the line will likely remain affordable.

“The increase in the mortgage rates are going to be so tame and so controlled that [homeowners] will be able to adjust over time,” Gudell says.

Fleming adds that a 1 percent total increase by the end of 2016 will likely bring your interest rate to 4 to 5 percent, equating to about $50 to $70 per month in additional payments, which is minimal. “You can find 50 bucks by going to Starbucks less often,” he says.

You should still shop around. Treat your mortgage like any other major purchase — weigh your options and compare rates before you sign on the bottom line. The mortgage, and your ability to pay it off, are just as important as the house you choose to buy.

“Consumers will be able to mitigate some of the increases by putting as much effort into finding their mortgage as they do in finding their dream home,” Smoke says. “You don’t just take the first offer; you don’t just go to the lender that was recommended. Pursue and understand that you can get different rates.”

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Filed under: Selling

By Blake Miller

You don’t have to pretend the holidays don’t exist if your home is on the market this time of year.

Selling a home during the holidays can be tricky. Decorations could turn off potential buyers who might have been interested in buying a particular home — if they hadn’t been distracted by the huge collection of inflatable decor in the front yard.

“Curb appeal is an important element of real estate at any time of the year,” says professional home stager Krisztina M. Bell of Virtually Staging Properties Inc. in Atlanta. “During the holiday season, curb appeal often takes on a new meaning as people decorate their homes and landscapes to reflect the joy [of the season]. There is a fine line between attractive outdoor decorating and pushing the limits, especially when staging a home during the holidays.”

The good news is that you don’t have to completely avoid holiday decor. In fact, says Justin Udy, a real estate agent with Century 21 Everest Realty Group in Utah, “homes can actually show better during the holidays.”

Here are five ways to enhance your home’s curb appeal during the holidays.

Light it Up

“A well-lit entryway provides a charming invitation for guests or potential homebuyers,” says Bell. “Use LED candles or lanterns with globes to light entryway steps and walkways. If there is a wreath or arrangement on the door, place a spotlight on that area to highlight the festive accessory and create a warm, welcoming glow.”

If you must decorate with string lights, white lights are best, adds Bell. “White outdoor lights on the outside of a home are recommended, and are inspiring and beautiful,” Bell says.

Skip the Kitsch

While you may adore that waving Santa inflatable in your yard or shrubs covered in colored lights, rethink bold statement decorations when your house is on the market. “Avoid the blowup snowman, reindeer and the like strewn about on the front lawn, as you don’t want to distract and take away from the features of the home,” says Bell. “Less is best.”

Keep it Minimal

Similar to when you’re getting your home ready to sell when it’s not the holiday season, the concept of less is more also holds true this time of year. (So keep the tchotchkes to a minimum.)

“It is key to maintain a very clean and crisp appearance,” says Josh Myler, a real estate agent with The Agency in Los Angeles. “Buyers want to feel comfortable but also have the room to envision their own belongings and decorations in what might just be their new home. Clutter is never a good thing, and the holidays have a tendency to bring out more of it.”

Create Vignettes

Focus on simple yet eye-pleasing holiday vignettes throughout your home. “Create a vignette in a wheelbarrow, or use a small section of patio,” suggests Bell. “Use simple holiday decorations, plants, and other items to create an attractive scene to spruce up outdoor spaces.”

Fashion a Welcoming Entry

If you decide to rid your home of all holiday decor except for a few key items, make sure to include a wreath on your door. “One of the great things about wreaths is that they can easily be customized to match the personality of the home,” says Bell. “A simple live wreath on the front door is classy. Add a big bow for major impact.”

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Filed under: Economy, Foreclosures, Home Equity

By Melissa Allison

For the past decade, housing in Las Vegas has been a scene straight out of the Wild West. Rules have been bent, and lives ruined — a consequence of a housing crisis that caused such catastrophic and widespread declines in home values that much of the city remains on its knees. (Click here for Zillow’s video on the Las Vegas bust.)

At one point in 2012, more than 70 percent of Las Vegas homeowners with mortgages were underwater, many of them owing more than twice what their homes were worth.

The negative equity rate has fallen to 25 percent but remains higher than any other major market. In normal markets and times, that rate is closer to 3 percent.

Among those affected is Terrie Brooks, a bingo agent for 30 years who never dreamed she’d resort to giving blood to pay her mortgage.

With income of $60,000 a year and money in savings, she paid her mortgage for four years after the recession hit and her employer cut her hours.

She fell behind after her college-age son, who rode a moped between classes and work to save on gas money, was in a terrible accident. A traumatic brain injury left him incapacitated for two years before he died.

“I thought I had put away for a rainy day and was keeping up. Once my son was in the hospital, I didn’t care,” said Brooks, who often stayed home, even when work called, to feed her son and otherwise care for him.

“I gained weight, my health went to hell. You don’t care anymore…. Then you say, ‘Look what a mess I’ve gotten into because I didn’t care.'”

Brooks tried to make up for the lost hours by selling blood and participating in focus groups.

She also tried to get a loan modification but became stuck in a bureaucratic cycle — a process so common it was the subject of one of the focus groups she was paid to attend.

Squatters and Their Tenants

Getting a loan modification when people all over town — and many across the country — want one too is no simple thing.

Some people give up and stop paying.

“I closed a deal in August where a guy hadn’t made a payment in 88 months,” said Tim Kelly Kiernan, a real estate agent with Re/Max Benchmark Realty.

“It wasn’t illegal. He was just playing the system.”

That homeowner wasn’t alone, by a long shot.

Many people in Las Vegas stopped paying their mortgages for months and years at a time with little consequence.

Some filed for bankruptcy and walked away, assuming lenders would take ownership, only to return years later to find the homes still in their names.

Sometimes, their homes had been taken over by squatters or, more absurdly, by renters making monthly payments to someone who’d swooped in and pretended to be the owner of an empty house.

Kiernan had one such client who ended up doing a short sale — negotiating with his lender to sell the house for less than he owed — and walking away with cash to relocate (and to leave the house in good condition).

There were even cases of homeowners being sued by squatters who were injured while squatting, Kiernan said.

“I can’t make this stuff up,” he said. “There are all these crazy stories, and [that] story is very common — people filing bankruptcy and leaving their property thinking they were done.”

Tangled in Red Tape

Getting lenders’ attention is the hard part.

For a while after the housing bubble burst, lenders rubber-stamped foreclosures so fast — in Las Vegas, foreclosures reached six times the national rate — that they ended up in trouble and were forced to slow down.

Now they often approve short sales and loan modifications, if a borrower keeps the same lender long enough to negotiate such a deal and to exchange the proper paperwork.

“It can be very frustrating,” said Christine Miller, a lawyer at the Legal Aid Center of Southern Nevada.

“Even though you sent a packet, and the fax transmittal shows 54 pages went through, they [the lender] will say they don’t have it, or to send it again.”

It’s against mortgage servicing regulations to draw out the process, but fighting that means filing a complaint with the Consumer Financial Protection Bureau, “and that’s a process” as well, Miller said.

Tangled in financial red tape, some homeowners turn to experts like Judah Zakalik, an attorney who for two years defended banks against predatory lending lawsuits, then was laid off and switched to the consumer side.

People have to be careful where they turn for help, Zakalik said.

“When we started in 2009, there were probably over 250 loan modification specialists and attorneys in this city doing this work,” he said. “A lot of them were taking advantage of people’s desperation.”

Some charged upfront fees, then skipped town. Others filed bankruptcy papers but didn’t take clients’ names off homes — and squatters often beat lenders to those properties.

Even now, people are renting abandoned homes from landlords who are not the rightful owners. “I see it at least once every two weeks. I saw it this morning,” Zakalik said.

A Morality Shift

Despite their dire situations, many people balk at filing for bankruptcy or not making mortgage payments.

“They’ve been told, ‘You’re a bad person if you do that,'” Zakalik said.

During the recession, he said, “I’d sit down with people and have discussions about their morality. [I’d tell them] you have to look out for your family’s future. If you throw $700,000 at this loan, you’re taking away money you could invest in your future, your retirement, your children’s future.”

The need for those discussions has waned.

“People understand that now. They understand that corporations are looking out for their own best interests, and they have to look out for themselves.”

There’s been a shift in moral consciousness, he said, “at least in this city.”

Military retiree Robert Lujano stopped making payments just to get his lender’s attention.

“They said, ‘You’re not making payments.’ And I said, ‘That’s right. Didn’t I try for five years to get you to refinance?'” Lujano recalled.

He negotiated a short sale that included $2,500 in relocation fees. It only marginally hurt his credit score, and he plans to buy another house next spring.

“This would be a great time for many, many people to buy a house,” he said.

With help from the legal aid center, Brooks also renegotiated her mortgage — but the relief is temporary.

Her monthly payment has dropped from $1,300 to $760. After 22 years, however, she will owe the full balance of her original loan — $100,000.

“They said, in a couple years I can do a short sale,” Brooks related hopefully.

If not, there’s bound to be another way.

Already, a passel of homeowners are pioneering another mortgage frontier: re-defaults.

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