Instead of searching for a new house, turn your current one into your dream home!

When it comes to landing the home of your dreams, some times the grass isn’t any greener anywhere else. Instead of dealing with the hassles of shopping for a new home, why not turn your current home into one you love by taking on a remodeling project?  It’s easier and more affordable than you think.

How can I finance a remodeling project?

There are a few options if you don’t have the cash immediately on hand.  First, see if you can refinance your current mortgage by pulling cash out of your equity.  Secondly, look into taking on a second mortgage, like a closed-end or HELOC.  Thirdly, you can see if you qualify for a 203(k) mortgage, which is designed to help people upgrade their fixer-uppers.  You can also see if you qualify for home improvement grants.

I’ve got funding. What’s next?

Once you’ve set a budget and decided on a remodeling plan, the most important thing to do is make sure you’ve got a solid, reliable contractor.  Here are some questions to ask.

• Are you licensed?
• Do you carry General Liability Insurance?
• Do you carry Workers’ Compensation Insurance?
• Are you a member of NARI or NAHB?
• Will you take care of all the required building permits?
• Is your work guaranteed?
• Who will be in charge of the remodeling project?
• How do I communicate with my job foreman?
• Will you provide me with written references?
• How do you handle daily job clean-up?

Knowing the answers to these questions will help ensure you’re safe from a variety of issues, from personal injury lawsuits for workers on your property to getting the job done on time in the way you expect.

Even if it’s not the right time to look at purchasing a new house, you still might be able to afford to upgrade your home.  Take a look at your options, and get a little creative!  For more ideas and advice on everything home-related, tune into the Truth In Lending Show or listen online.

Make sure your dream home really is a dream come true with an ASHI-certified home inspection.

Last weekend, we were proud to have Nick Welty of InspectorNick.com on the show to talk about why home buyers should never purchase a new home without insisting on a complete home inspection done by a Home Inspector certified by the American Society of Home Inspectors.

What happens during a home inspection?

During a home inspection, a certified home inspector will complete an objective visual examination of the physical structure and systems of the house, including the foundation, roof, major appliances, plumbing and electrical systems, heating and cooling systems, visible insulation, and all structures like walls, windows and doors.

Why is it important to have a home inspected?

Because a home is such a huge investment, it’s important to make sure you know exactly what you’re paying for.  If there are any repairs the seller is hiding or just plain unaware of, a home inspection will reveal them, which allows you and the seller to either work out a plan for repair or you to get out of the deal unscathed.  Similarly, if you’re getting ready to sell your home, an inspection can identify issues that can help you improve the selling value and marketability of your house.

Is it really necessary to hire someone?

Unless you yourself are certified as a home inspector, it’s really best to hire a professional. ASHI-certified inspectors are trained in all aspects of home building, from the construction to the home’s systems. They know what to look for, and they have the ability to remain objective — something that can be difficult for homebuyers and sellers since you’re emotionally invested in the situation.  An inspector is only invested in providing an objective account of the condition of the home.

Is it expensive?

Prices vary according to location, individual inspector fees, and special services (such as septic or radon testing) requested, but you can expect to pay between $100 for “bargain” inspectors or as high as $800 in some areas of the country.  That being said, the cost of skipping the home inspection can be incredibly high if unexpected and expensive issues pop up, and the peace of mind knowing the home you’re purchasing is in the shape you expect it to be is priceless.

How do I find a home inspector?

The best place to find a certified home inspector with appropriate qualifications is the ASHI’s Find an Inspector form. Here you can search by location and specialty.  Of course, if you’re in the Kansas City metro area, be sure to check out InspectorNick.com.  Nick and his team have a host of certifications to offer you the best quality home inspections for your money.

Check out last week’s show online to hear more about the home inspection process and to learn about the ins and outs of the mortgage process.

Preparing Your Home For Severe Weather

You should identify an area of your home to take shelter in the event of severe weather.

If you live in a house, apartment building or a structure of any kind, go to the basement or the center of a room on the lowest level that is the furthest away from all exterior walls, windows, and doors.  Essentially, you want to put as many walls between yourself and the storm as possible.

If you live in a mobile home, you should have a plan in place to get to the nearest sturdy building or storm shelter in the event of severe weather.  Even if your mobile home is tied down, it’s not enough protection during a tornado.

Additionally, FEMA recommends having a Basic Disaster Supplies Kit, which should include the following items.

• Three-day supply of non-perishable food (like granola or protein bars, fruit snacks, other open-and-eat items, as well as food for pets)
• Three-day supply of water (estimate one gallon per person per day, with extra for pets)
• Portable, battery-powered radio or television and extra batteries
• Flashlight and extra batteries
• First aid kit and manual
• Sanitation and hygiene items (moist towelettes and toilet paper)
• Matches and waterproof container
• Whistle
• Extra clothing
• Kitchen accessories and cooking utensils, including a can opener
• Photocopies of credit and identification cards
• Cash and coins
• Special needs items, such as prescription medications, eye glasses, contact lens solutions, and hearing aid batteries.
• Items for infants, such as formula, diapers, bottles, and pacifiers.
• Blankets and pillows
• Anything else your family might need

Check out FEMA’s detailed Are You Ready? Guide for more information.

During the Storm

Keep an eye on the news or an ear to your radio during potential severe weather.  Here’s what the alerts mean and what to do:

• Tornado watch: Conditions are right for tornadoes to form, but none have been spotted. Keep alert, watch the sky, and be ready to take shelter.
• Tornado watch: A tornado has been spotted or identified by weather radar. Take shelter immediately.

Besides TV and radio, other danger signs of an impending tornado are a dark, greenish sky; large hail; a large, low-lying cloud, especially if rotating; and a loud roar often said to sound like a freight train.  If you see any of these danger signs, take shelter immediately.

Inside your shelter, you can use a sturdy table for extra protection. Always use your arms to protect your head and neck.  Do not open windows.

If you find yourself in a car or outside, find a ditch or a depression in the ground and cover your head with your hands to protect yourself from debris.  A ditch or depression is actually safer than a bridge.  Never try to outrun or outdrive a tornado.

After the Storm

If your neighborhood is hit by a tornado, keep these tips in mind:

• Make sure the storms are past before emerging from your shelter.
• Do not touch downed power lines or anything touching them, including water. When in doubt, just stay as far away as possible.
• Wear solid, sturdy shoes to inspect the damage, as injuries can happen during inspection and clean-up, too.

For More Information

Your best defense against severe weather is to be prepared. For more tips from Chief Meteorologist Bryan Busby, check out last week’s show online, and tune into KMBC in Kansas City on your TV for the most accurate and up-to-date severe weather information, or keep yourself informed via the radio by listening to KMBZ 98.1 FM or 980 AM in Kansas City or KNSS 1330 AM in Wichita.

1. Structures other than your home, like garden sheds or free-standing carports, are usually covered at Actual Cash Value.  This means that your insurance will cover the cost of the value as the structure currently is, rather than the value to purchase a replacement.  This is usually enough to cover your repairs, but it will rarely be enough to replace a structure.  Check your policy for specific details.
2. The job of a claims adjuster is to figure out what actually happened — or to rule out the obvious.  For instance, if there’s a big rainstorm and your basement “floods” due to failure of your sump pump, an adjuster will make sure the damage is not actually flood damage — meaning there wasn’t a flood in the area that caused the damage.
3. If you spend money to protect your home from further damage, make sure you keep the receipt, as these costs will probably be covered in your claim.
4. If you have severe weather damage, use a video camera (or even your phone’s video camera) to record the damage, especially if you have to dispose of any debris.  Claims adjusters prefer it if you don’t remove anything until the insurance company can visit the property to see the damage, but we understand that’s not always possible.  A video recording of the damage is a good substitute.
5. Instead of calling your insurance company’s national line, ask your agent to file the initial claim, called the first notice of loss or FNOL.  If your agent refuses to do this, then, in short, get a new agent!  You’re their client, and they should want to serve you. The purpose behind having your agent file the claim is that your agent knows exactly what information is needed for the FNOL, saving you the hassle of and letting you get on with getting your home back in order.

Dealing with weather damage to your home is never fun, but these tips will help you get back on the road to “home, sweet home,” as quickly and hassle-free as possible.  If you missed the show last week, you can still hear Felisha’s expanded advice along with severe weather tips from KMBC’s Chief Meteorologist Bryan Busby by listening to last week’s show online.

If you’re not familiar with the show, Mike dives in and rescues homeowners when their home renovations have gone terribly wrong.  He also stars on Holmes Inspection and serves as a judge on All American Handyman.

Home renovation and design is a family affair for Mike, who first started learning about construction work at the age of six years old from his father.  His father’s teachings obviously took because Mike had started his first contracting company by age 19, and he founded his own renovation company two years later.  He’s since passed on the craft to his own son, Mike Holmes Jr.

Having been called “an accomplished master builder with a social conscience by Canada’s House of Commons, it’s no surprise that Mike started The Holmes Foundation in 2006 to encourage young people to pursue construction and renovation as careers, as well as to help people who have been steamrolled by bad renovations.  He and his crew also built an eco-friendly and hurricane-resistant house in New Orleans as part of Brad Pitt’s “Make It Right NOLA” project after Hurricane Katrina.

Mike’s still highly involved in construction and renovation off camera, with his home inspection service, Mike Holmes Inspections, and his custom home building program, Holmes Homes.  You can learn more about Mike Holmes on his website or by listening to last week’s show online, where he gave us his take on what’s happening in today’s remodeling world as well as shared his Top 5 things a homeowner must do to make sure his or her remodeling project is done right!

Make sure to tune in this week to hear Bryan Busby’s tips to keep you and your loved ones safe from severe weather this season!

Each American born on U.S. soil, or immigrants who have left everything to live here, all feel entitlement to the “American Dream.” And maybe it’s because dreaming of endless possibility is nothing new, and the idea has actually been around since the 1660s. We’ve talked about it on our show in regards to buying a home. And while it can mean home ownership for some, it actually means a lot of different things to other people.

Where did “The American Dream” come from?

The phrase “The American Dream” came from a freelance writer in the 1930s. However, the idea behind America being the land of freedom to achieve prosperity actually stems from our country’s original Founding Fathers with the Declaration of Independence in 1776. Themes of justice, equality, freedom and opportunity ran through the country’s founding documents. Many immigrants in other countries sought the freedom the Declaration offered and made the journey to the U.S.A.

It’s James Truslow Adams that is given credit for coining the term “American Dream” that was featured in his book The Epic of America in 1930. Adam’s book stated,

“that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement. …  It is not a dream of motor cars and high wages merely, but a dream of social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable, and be recognized by others for what they are, regardless of the fortuitous circumstances of birth or position”

What’s Your American Dream?

Very early on, this American dream took the form of land and home ownership. The possibility of moving West and establishing a home appealed to families around the world. The United States became a haven for pioneers seeking independence and freedom – and a farm or two.

Even through cultural shifts, political and economic changes and global shifts, the ideal of the “American Dream” continues to carry on from generation after generation of Americans. For many, it still means home ownership. For others, it simply means success that comes through hard work or making it “big” on the basketball court. Some see wealth and success as the dream. And still there are still some that say it simply means the freedom of choice. And the great thing about this ideal is that it’s OK for it to take on different forms to different people. Because in the end, it still really means the same thing:  liberty and justice for all, and the opportunity for everyone to enjoy prosperity.

Learn More

History of the American Dream

Xavier University’s Center for the Study of the American Dream

Voices:  What Is the American Dream?

If you’re considering buying a house this year, make sure to tune in and hear Tara-Nichole Nelsons’s advice about things to do NOW if you want to purchase later this year. But until then, we thought we’d give you a few more things to think about as you make your plans.

Life Planning = Home Buying Planning

Believe it or not, your “5-year plan” at work and your family growth strategy all come in to play when you purchase a house. Before you even start looking for that dreamy bungalow or two-story Victorian, make sure you have the right mindset when you go house hunting.

Career Plans

Your current job effects your home purchase in more ways than you might realize. Sure, you’ll need to prove income and stability when it’s time to secure your home loan. However, your goals and aspirations for your career should also come in to play when buying a house. A few things to consider:

• Do I like my current position and is my job fairly stable?
• Do I have room to grow in my career and possibly make more money?
• Is this a long-term career for me, or would I like to change jobs in the future?
• If I change jobs, is this the area of town (or the country) I want to live?
• If I do get promoted within this company, would they pay for any housing or relocation costs?
• Would I be willing to transfer and relocate?
• If I leave this position, do I have the savings to cover a mortgage until I find a new position?

Thinking through these questions is critical. Sometimes, buying a house needs to wait based on where you’re at in your career. However, other times it’s a smart financial move for you to go ahead and start the house search.

Family Plans

Dreaming about a family of two or three kids isn’t just for flirtatious lovebirds planning a life together. If you’re thinking about buying a home, you need to consider your future family plans. Some buy real estate for investments, but many buy a home as a way to settle down and have a family. So, have a plan in mind for how long you’d like to live in a house and what you think your family might look like in the future. If you need help sorting out a plan for how long to stay and price ranges to look at, make sure to meet with a certified mortgage planner. They’re pros at figuring all of that out for you.

Meanwhile, think through these questions regarding your family before you look at houses:

• What is the size of my current family (one person or five people?) Am I hoping this changes in the next few years?
• If I don’t have kids now, do I hope to have them in the near future?
• How many kids do I want?
• Do I currently have young children?
• Are my children older and planning to be out of the house in a few years?
• Am I on the verge of becoming a grandparent?

Your answers to these questions will lead you to the right neighborhood, size of home, layout and more. Young kids have different needs than older children, and seasoned adults on the verge of retirement will be looking for something very different from a newlywed couple. Think through your family’s plans. It will guide you to the right home.

These questions will give you a good running start when it comes to finding the right house to purchase.

Here were a few of Tonya’s thoughts on generating monthly cash flow and generational wealth:

Real Estate Can Bring you in a Monthly Cashflow

Tonya works with several professional athletes, but her principles can be applied anywhere. She helps people line up an investment plan through using real estate. This also includes building ways to generate monthly cashflow. This especially has benefited athletes who never know if they will have an injury or be cut, and find themselves without the income to continue living their large lifestyle. For those looking into how to bring in a monthly cashflow through real estate, she says to make sure you do it right.

- Work With Professionals for Investments

Tonya recommends that you find experienced, knowledgeable professionals to offer you advice and guidance for your real estate purchases. Never trust someone who “does it all,” find specialists in each field – listings, lending, etc. An experienced professional will let you know when it’s the right time to be the buyer, seller, borrower and lender. This can bring in monthly income that never goes away, if done right.

- Know Your Market That You’re Buying Into

In addition to working with a professional, it’s critical to understand your market. In some areas of the country, purchasing single-family units is the key to generating income through real estate; in other places multi-family homes are more profitable. Tonya says you can NEVER educate yourself too much, and always find someone who will answer your questions. This will help you buy right, and purchase property that will be attractive to potential renters.

Tonya also spoke with us about her beliefs about principal reduction:

- The Banks Need to Reduce Principal

Tonya believes that if the banks would reduce principal (which she says they can do since they have funds they are sitting on,) it would create millions of jobs and put billions of dollars per year into the economy. Because many people aren’t in the practice of saving, people would take their extra monthly income they save on principal and put it back into the economy through spending.

- Federal Programs Won’t Solve The Crisis

Tonya believes programs like HARP and other federal housing aid haven’t helped the economy, and won’t. To date, these programs were to help millions of homeowners and numbers have fallen short. She feels these programs have been a band-aid on the problem of the crisis, and the economy won’t be solved this way. People will strategically default and make a better situation. She urges real estate professionals to push principal reduction, even if it personally affects them, in order to be a part of the solution and find a way out.

We agreed with her something must be done, and put in a personal push for allowing homeowners who have been making their payments to refinance at a lower rate, without any equity or an appraisal, to reward them and get savings in their pockets.

We hope to have Tonya join us again to continue our conversation about principal reduction and her ideas on the national real estate market.

Have a question for Tonya or our TIL Show hosts? Let us hear it!

Here are Egypt’s top 5 tips for “Property Virgins”

1. Stay Flexible! Keep an open mind as you look at many “first home” options.
2. Get to know the “Short Sale Process”, which is the pre-foreclosure action taken by the home seller.
3. Get to know the “Foreclosure Market”. Due to the economy, many of the homes in foreclosure are in very good condition.
4. Don’t assume you’re the only one bidding on a home. Even in a soft market, bidding wars happen all the time!
5. Put yourself in a “home owner” frame of mind! Calculate the details of your new home buying plan in advance. Figure out how much you can afford to pay each month. Don’t forget taxes, insurance, monthly home association fees, utilities and maintenance.

Egypt’s Best Advice: “Don’t listen to all the negativity in the media about the real estate market. All Real Estate is LOCAL! Pay attention to what is happening in the market you where you want to invest! This is the very best time to buy because of the low interest rates AND the low price of homes! Keep the faith, do your homework and invest wisely!

How to become a guest on “Property Virgins”: Go to HGTV.

No one knows what the future holds for you, your family, your job or your finances. But we can help you understand what you’re going to encounter when you embark on the sometimes-difficult journey toward the “American Dream” of owning a home.

1. Renting provides flexibility. If you think your job may change sooner rather than later, renting is probably your best bet. You don’t have to worry about the upkeep of the property when you’re renting; in most cases, upkeep is the responsibility of the landlord. For short term, renting is almost always the best option.
2. When you get the urge to buy a house, the first thing you need to do is step back and ask yourself whether it makes more sense to keep renting for a while longer. If the answer is no, then you need to ask yourself if just how much house you can afford.
3. If you’re looking for the best return on your money, historically you’re better off investing in the stock market than buying a house. Primary homes generally don’t earn the investment return of financial instruments such as mutual funds or stocks.
4. Uncle Sam helps out by letting taxpayers deduct part of the mortgage interest and real estate taxes each year. Borrowers get the benefit only if they pay enough in one year to exceed the standard deduction. But, that usually happens, especially during the first few years of a mortgage when most of each payment goes toward interest rather than principal.
5. Home owners build equity over time as home values rise and their mortgage balances shrink. They also don’t have to worry about their housing costs shooting through the roof because lenders cannot boost borrowers’ rates and payments, unless those borrowers have adjustable-rate mortgages.