A New Beginning

Last Spring, in an attempt to find better jobs and recover from some hardships, Dylan and I offered my parents and my sister a place to live, and last year, the three of them moved in with Dylan and I. This past Thursday, my parents and my sister closed on their new house.  After four years of broken dreams, hearts, and stress levels off the charts, they are now on their way towards a brighter future. I could not be happier that they have been able to reach this point in such a short time, and I know that they are grateful for the positive things that have happened for them in the last year. I can only hope that the positives continue to outweigh the negatives and that their house becomes a home very soon.

Yesterday, the moving company arrived at 7:30am and our house was emptied of all of their belongings.  With the vacant rooms on the first floor, Dylan and I also have a new beginning - living alone!  We moved in together when we were in college, and we have shared three different apartments together, our last being in Indiana.  After leaving Indiana, we moved in with Dylan's parents, who were more than happy to have us closer, but also very generous and allowed us to live with them for just over a year. Straight from that living arrangement, we closed on our house, and my family moved in with us.  So, for the last two and a half years, we have shared our home or shared someone else's home.  It will be nice to finally be just the two of us again - I really missed that.

The most exciting thing about this is that I can finally get to work on making our house a home - painting the walls and trim (and ceilings!), buying furniture, tons of DIY projects - I can't wait!  In fact, we have a lot going on already, which I am so excited to talk to you about.  So, be on the lookout for some great posts coming up in the next few weeks about our floor adventures, having a gigantic house to buy furniture for, and all of the little projects I have planned!

Move Out Cleaning Tips

One of the most time-consuming task of moving, besides packing, is cleaning.  Whether you are renting or selling, you will need to clean up your empty space before handing over the keys to the new occupants.  Breaking up the cleaning across multiple days makes it much less boring and chore-like, so here are some tips on how to clean up your space when moving out. 


Cleaning Basics - 

For cleaning, Hydrogen Peroxide or White Vinegar will be your best friend - it can be used on practically everything and is very effective.  Using microfiber cloths will help in your cleaning, as they leave little dust and can be rinsed in the sink, and ultimately washed in the washing machine instead of thrown out and replaced by another paper towel.

Take advantage of space and time. Choose one or two rooms in your house that you do not use on a daily basis, like a spare bedroom or a dining room, and when you have a box packed, put it in that space. Keeping all of your packed items in one location will help you be organized and keep most of your house in working order and not overwhelmed with boxes and out-of-place furniture.  Once you have emptied and finished cleaning a room, close the door and don't go in it again so that you are sure that it is as clean as possible for your move-out.

Break up your cleaning across multiple days, especially since it will take you some time to pack up and get your belongings out of the space.  For example, put some cleaner/bleach in the toilets and let them sit for about a half hour while you go clean something else. Multi-tasking will really help you get things done quicker.  And if there is someone else helping, split up the work.  Work in different spaces so you aren't crowding each other, and set goals or make it a competition so that you have motivation to work harder and faster.

Once you have started packing items that you don't use very much, consolidate your other items into one space. For example, if you have packed up some extra kitchen utensils and appliances, move the rest of your kitchen items to different drawers and cabinets so you can begin wiping down the inside of the empty cabinets.  If you have multiple bathrooms in your home, try to make it a point to use only one bathroom the week of your move, that way you can clean one of the bathrooms fully, taking one less thing off your final list.


Whole House -

Clean the things that have the least likelihood of getting dirty while you are moving out. Wiping down windowsills, moulding, baseboards, and washing the windows are things that can be done a few days or even a week or so in advance. If you have pets that push their noses up against specific windows or the doors, save those for closer to move out so you don't have to clean them a second time.  Dust off light fixtures and replace all of the non-working light bulbs.  

Sweep and vacuum all floors, but make sure that you leave the carpet shampooing and floor mopping for the very end, as you don't want to walk over your newly washed carpets or floors.

If you have a washing machine and a dryer, run a hot water cycle in the washer with some white vinegar to get rid of any smells and soap residue.  Vacuum out the dryer vent and wipe up any laundry detergent spills in the laundry area.

Wipe down the tops of cabinets, baseboards, and door frames, and sweep and vacuum out any fireplaces that you may have.  Patch the holes in the walls and give them a day for the plaster to dry that way you can then paint over it with some touch-up paint.


Kitchen - 

Go through the freezer, refrigerator, and pantry to get rid of items that you will not be using before your move.  Pantry items can be packed in a box and be transported to your next home, however, refrigerated and freezer items may not be transportable if the distance you are moving is too great.  Decide what items you want to keep, and give away unopened foods that you do not want to keep.  For those items that you will be getting rid of, dump the food or liquid into your garbage disposal or into a trash bag, and then rinse and recycle the containers.

Don't use the self-cleaning option on the oven - it never works well, it smells, and it makes your space very very hot since it heats the over to over 500 degrees.  A Brillo-pad or a tough scrub brush will be much better and faster for you.  Remove the stove-top grates and range hood vent, and soak in soap and hot water to remove dust, and grease build-up. 

Remove all of the shelves in your refrigerator to wash them, and don't forget to empty out the ice maker as well.  When you leave, be sure to set your refrigerator and the freezer to the least cold option so as not to waste additional power and over-freeze the unit.  

Run your garbage disposal with a half of a lemon to remove any food debris and smell that may be remaining.  


Bathroom - 

Clean the inside and the outside of the toilet using some sort of bleach solution. Clean the countertops and the sink, wash the mirror down, and wash out the shower and/or the bathtub.  Snake the drains to remove any hair and soap residue and then pour a cleaner down the drains to take care of any potential clogs further down the pipes.

Remove the ventilation fan from the ceiling, and rinse the cover under hot water to remove the dust and build-up.  


Garage - 

Sweep out the garage, if you have one, making sure that you get all of the cobwebs in the corners. Make sure that the garage door opener is working and the light bulb is not out.  

If there are any wet oil spots on the floor of the garage, treat them with sawdust or cat litter, and then scrub them with dawn dish soap.  


Exterior - 

If you are responsible for the upkeep of the exterior of your property, be sure to cut the grass one last time before you move out, and rake the clippings or leaves that may be in the yard.  Sweep the walkways and the driveway, and any porch or deck that you have.  

If you have animals that use your backyard, make sure you pick up all of their toys and "waste" so that the backyard is clean and can be used by the new occupant.  


While some of the things on this list may need to happen during your last day at the property, a lot of these items can be accomplished during the few weeks before you move. To help with making sure you get everything you need to done in a timely manner, you may want to consider making yourself a cleaning calendar so that you stay on top of the tasks and you don't overwhelm yourself with the amount of work that needs to be done on top of packing and unpacking.

Good luck with your move!

The 203K Mortgage Process

A 203K Mortgage allows for renovations to be done to the property without cash coming out of your pocket.  Since your lender is technically paying for the renovations, they will require a lot of additional paperwork to verify that the work will be completed by trusted and experienced contractors.

Once you have determined if a 203K Mortgage is right for you, you will need to speak with your lender to determine what steps need to be completed before you can close on the purchase of your new home.

203K Consultant

To begin, the bank will provide you with a list of 203K Consultants in your area.  The 203K Consultant will help you determine what work can and cannot be done to your property, in addition to helping you with the disbursal of payment to the contractors and inspection pre- and post-renovation.  You will select a consultant from this list, and he or she will work with you throughout the duration of renovations to your property.  The Consultant fee may be due at the beginning of this process, however, if you have paid out of pocket for this expense, you will be reimbursed at the time of closing, as this fee should be included in with your mortgage payments.


203K Inspection

Once you have chosen a 203K Consultant, he or she will inspect your home for the items that you wish to have changed.  You may want to take advantage of the findings from your original home inspection and have some of those items fixed in your renovations.  Your Consultant will either approve or disapprove the items that you have on your list, and give you the clear to begin finding contractors to complete the work.

Contractors

Depending on the amount of work that you are having done to the property, you may be required by the bank to hire a general contractor to supervise the work and gather the necessary information from your sub-contractors.  You may also choose not to have a general contractor and to act as one yourself, but this will require you to not only gather all of the information from your sub-contractors, but also to be responsible for the disbursal of money when the individual jobs have been completed.

If you choose to hire a general contractor to oversee the renovations on your property, he or she may be responsible for finding sub-contractors that specialize in the areas that you need.  If your general contractor is unaware of other contractors, you may need to help in getting recommendations from friends, family, or the internet.


Forms

In addition to the general mortgage forms that you will need to sign, there will be specialized forms specifically referencing the 203K Mortgage that will need your signature.  Some of these forms, such as the Borrower Acquisition Form, are just general knowledge agreement forms, whereas others, like the Consultant Package, will be specific to the renovations you wish to have done on your property.

Once the sub-contractors have been chosen, they will be required to provide you with completed forms that you will get from your lender:

Homeowner-Contractor Agreement - This form will be signed by you and the contractor, and will act as a written agreement stating that the contractor agrees to begin and complete the work within six months of the close date on the property.

Contractor Resume - This form has contact information for the contractor that you have chosen, including most-recent work completed and references from past customers, as well as supplier contact information.

W-9 - This is a typical W-9 form for tax purposes so that the bank can verify that the contractor is legitimate.

License and Insurance - The bank will require a copy of the contractor's license and verification that they have insurance for the work they perform.  

Complete Estimate - The 203K Contractor will require a line-item list of all of the work that will be completed by the contractor, including the prices of all supplies and labor, and a total project cost.  The total cost of all sub-contractor projects must be less than the amount of money you have been pre-approved for minus the sale price of the property.

Permit Form - The bank will require that you, the general contractor, or the sub-contractors gather the appropriate building permits from your city or town.  Copies of these permits will need to be provided to the bank, in addition to hanging these in your home, in a spot visible from the exterior of the property.


Submission to Lender and Consultant

Once all of the information has been received from the general contractor or sub-contractors that you have hired, you will submit all of the information to your lender.  The Complete Estimates will be given to your 203K Consultant, who will put them all together into a Consultant Construction Package and submit it to the bank.


Closing

In addition to all of the typical mortgage paperwork that you will be signing at your closing, you will also be signing 203K paperwork.

Once you have closed on your property, work must be started within 30 days and finished within 6 months of the close date.


Contractor Work and Payment

Once the contractors have finished their work, the 203K Consultant must come back to the property to inspect the work and verify that it has been completed and is now in working order.  At this point, the 203K Consultant will write up a "draw sheet", which is the paperwork that will eventually disburse payment for the contractor.  You can have as little as one or as many as five draws done during your renovations, but it is suggested that you wait until you have more than one contractor done with their work to have the first draw done, as it will be easier for the consultant and the bank to do fewer draws.

Once the inspection is complete, the consultant will submit the draw sheets to the mortgage lender and the funds will be disbursed via check.  If you are using a general contractor for your job, the check will be made out to the general contractor and you, so it will need to be signed over to one party before a personal check is written to each sub-contractor.  If no general contractor is in the picture, the check will be made out to you and you will need to write a personal check to each sub-contractor.

If you have decided to do more than one draw over the duration of your renovations, only 90% of the full amount owed to the contractors is released.  The remaining 10% of the balance due to the contractors is held until all of the work on the property is completed.  This is information that you should provide to your contractors prior to hiring them for the work - some companies or business owners may not be able to afford to have some of the balance withheld for longer than the duration of their project.

When all of your sub-contractors have finished their work, the 203K Consultant will visit the property to complete his or her final inspection report and write up the final draw.  The same process as above will then happen, however, if you did multiple draws throughout the renovations, the remaining 10% balance for each contractor will be included in the disbursal check.


203K Completion

After the sub-contractors have been paid for the work they performed on your property, you will receive a 203K Loan Completion Letter from your mortgage lender stating that the 203K portion of your loan has been completed.  This letter should be filed with the rest of your mortgage paperwork.

At this time, you will also receive evaluation forms for both the 203K Mortgage process and the Administrators that have worked with you in filing your paperwork with your lender.



The 203K Mortgage process sounds very complicated, but please don't let this lengthy explanation deter you from going this route.  The 203K Mortgage is well worth the ability to renovate your property from the start without needing to use a great deal of money from your savings or your emergency fund.  Plus, with a deadline of 6 months from the close date, you are guaranteed that the renovations won't be half done and stay that way for years on end!

What is a 203K Mortgage?

That's the same question that I had when I first heard of it.  Being the first-time homebuyer that I was, I figured it was just a mortgage that you took out for $203,000.

Wrong.

A 203K Mortgage is an FHA Rehab Mortgage which allows you an additional budget to perform renovations to your newly purchased single-family or multi-family home.

But, before I go into detail about how the 203k Mortgage works, let me first explain how a traditional mortgage works.  When you find yourself in a financially stable place and have the desire to purchase a home, there are steps that you must go through prior to putting an offer in on a house. When researching your mortgage options, here is what you would find for a conventional mortgage.

A conventional mortgage is one loaned by a bank, credit union, or mortgage lender. The mortgage amount is the amount that you have agreed to purchase the property for with the seller minus your down payment.  This amount of money is how much you are borrowing from your lender and paying back via monthly payments.

A 203K Mortgage is slightly different. In a 203K Mortgage, your mortgage amount is the amount that you have agreed to purchase the property for with the seller minus your down payment, but including as much as rest of the total amount of money that you have been pre-approved for by your lender.

If you decide to purchase a property that needs renovations or cosmetic upgrades, you have the option to either purchase the property using a conventional mortgage and then renovate with the expenses coming out of your pocket, or to tack the renovations onto your mortgage.  The latter is what is known as a 203K Mortgage.  The only way for this type of mortgage to work, however, is if the purchase price that you negotiated with the seller is under the amount of money that you have been pre-approved for by your lender.  Here is an example:

You have been pre-approved for a mortgage of $200,000 plus however much money you have set aside for your down payment.  If you find a home that needs renovating and you will not have the cash to do the work immediately, you have the ability to do a 203K Mortgage. You must agree to a purchase price less than $200,000 in order to have leftover money available to rehab the property. If you agree to a purchase price of $175,000, you will then have $25,000 available to you for rehabilitation projects.

Your loan will then reflect the total amount of money that you are spending, including the rehabilitation costs. Following the numbers I used in the example above, your total loan amount would be for $200,000, even though the seller would only be getting $175,000 of that amount. Essentially, this translates to that the bank is paying for the renovations that you make and you are paying them back the cost in your monthly mortgage payments.

As long as the total cost of rehabilitation plus the purchase price of the property is less than or equal to the amount of money in which you have been pre-approved for, then you are able to use a 203K Mortgage for the purchase of your property.  

A 203K Mortgage is a much more involved process than a conventional mortgage, but I will go over the necessary steps in a separate post.

What are your thoughts on a 203K Mortgage? Is this something that you would consider doing for a property that you were purchasing?

How to Buy a House

Now that I am finally done with my vacation recaps, I figured I would get back to the home and DIY posts.  

House buying can be a tricky process.  There are so many steps and new things to learn that it is often confusing and stressful.  I have been seeing a lot of questions lately on the house buying process, and since the market is picking up and more and more first-time homebuyers are looking to take advantage of the low interest rates on mortgages, I figured that writing this post would help answer some questions that you may have.  Having gone through this process just over a year ago, these are the steps that we took to get our house.  

I hope that you find this information helpful, whether you are a first-time homebuyer or not. Please feel free to contact me with any questions that you have about the home-buying process or to let me know if I have left anything out.

One Year Down, Twenty-Nine to Go

Today marks the one-year anniversary of being a homeowner!

One year ago today, exactly 100 days after we came to an agreement with the seller on a purchase price, D and I FINALLY stepped into our real-estate lawyer's office to sign our names about thirty times and get the keys to our first home.

Our journey wasn't an easy one, and I never really got into it much here on the blog.  You'll notice that from the day we came to an agreement with the seller on a purchase price to the day we closed, we waited a total of 100 days. That's more than double the average closing period.  That's not to say it's what was originally scheduled for us - our original close date was July 31st.  We ended up with four other close dates before finally receiving our keys on September 10, 2012.

Our process was not enjoyable and caused a lot of headaches, stress, and weight gain, which was not the best thing to be dealing with just months before our wedding.  But, we overcame all of the turmoil, and ended up with a house that not only works for us, but one that we absolutely love.

We've made a ton of changes already to the house, and in the next few months, we have plans to change a lot more - specifically the interior paint colors.  We cannot wait to get more of our personalities to show in this house. And I can't wait to show it all to you!

Before and After: Roof Replacement and Exterior Painting, Front Door Included

Before and After: Tree Removal

One year down, and twenty-nine to go - that is until it's all paid off.  Makes me wonder how long we'll actually be here...

Home Inspection Checklist

When D and I were house hunting last Spring/Summer, we had a lot of questions, like most first-time homebuyers do.  One of the most important questions that we had was, "What should I expect from a home inspection?"

If you've watched any show on the DIY Network or HGTV, or you have purchased a home before, you know a little about what you should look for in a home inspection.  But, for all of the other things that you may not know you should have checked, here is a comprehensive list.

While you may not know what all of these items are, your home inspector should cover each item on this list.  If they do not, make sure to mention it to them, so they can take a closer look.

If you are looking for suggestions on Home Inspectors, you should talk with your realtor, who has likely worked with many different inspectors.  The Better Business Bureau (BBB) and Angie's List are also great resources for finding home inspectors.

I hope that you find this checklist helpful! Please leave me a comment if you notice anything missing from this list, or if you need clarification on any of the items!