Energy Saving Tips for Homeowners This Winter

We have a few different tips to help you save on your energy bills this winter. They’re surprisingly easy and inexpensive.

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Whether you love it or hate it, winter is here. You need to prepare your home properly in order to avoid big heating bills and freezing nights when the cold weather hits. Now, there are lots of large energy-saving projects out there, and they can all be worthwhile investments.

However, I want to share just three super simple tips with you today. Even though these tips are simple, they are still enormously effective in making you more comfortable at home while saving you money at the same time:

1. Get a draft snake (or two). The Department of Energy estimates that reducing drafts can lead up to 30% in energy savings. One simple way to reduce many of the drafts in your home is to install a "draft snake," which is a little cloth element that slips under your door. You can get a collection of draft snakes for just a few dollars each on Amazon, or you can fashion your own using nothing more than an old towel.

Reverse your ceiling fans to start.

2. Reverse ceiling fans. Hot air rises, while cool air hangs around your feet. This can be frustrating in the wintertime, because you don't want to run the heating without getting the benefits of it. An easy way to fix this is to run your ceiling fans in reverse. Instead of pushing air towards you, the fan will move that hot air that's clinging to the ceiling, dispersing the heat and making you feel warmer while spending nothing more on heating.

3. Flush your water heater. There are many things you can do to improve the efficiency of your water heater. However, simply draining your water heater can get rid of sediment and particles that are clogging up your heating machine and making it less efficient. Depending on the mineral content of your water, this could lead to a significant improvement in efficiency.

And there you have it, three simple and little-known tips to be a little more ready for the winter. If you have any questions for us about these tips or about anything else related to real estate, give us a call or send us an email. We look forward to hearing from you.

Should You Consider Refinancing?

Refinancing your mortgage is a great idea, but it could affect your credit score. Here’s how.

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Mortgage rates are still at historic lows. For many homeowners, it's a great time to refinance. Refinancing allows you to pay off your current mortgage with a new mortgage at a lower rate. Refinancing means lower monthly payments and more money left in your pocket.

But here's something important that many people don't know: Refinancing can affect your credit score negatively. You see, when you refinance, the new creditor will do a "hard inquiry" about your credit history. This inquiry can actually lower your credit score. Looking for new credit lines (like a new mortgage) equates with greater credit risk.

A hard inquiry could decrease your score by five points automatically.

How much will a hard inquiry actually lower your credit score? This depends on several factors. In some cases, a hard inquiry might not lower your credit score at all. However, if you've recently opened up multiple new credit lines (auto loans, credit cards, etc.), then a hard inquiry could decrease your credit score by up to five points. This is true if you only have a short credit history. And if you shop around for the best rate for more than 45 days, you will get multiple hard inquiries. Each of them will contribute to the total effect on your credit score.

So what does this all mean for you? Unfortunately, there's no simple answer. It's going to be a part of the calculation you have to make for yourself, which will also include the refinancing fees, your own credit history, and how much you could be saving with a refinanced mortgage.

If you're looking for help in making this decision, give me a call. I can put you in touch with several top Grand Rapids mortgage brokers.

Why Are Homebuyers Feeling Optimistic?

Why are homebuyers more optimistic than they have been in the past few years? Here’s what we found.

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Here’s a paradox for you: Right now, homebuyer confidence is at an all-time high, according to a survey performed by Fannie Mae. Furthermore, an increasing number of people, particularly renters, think now is a good time to buy a home. Yet at the same time, housing inventory remains very tight. It’s down 6.5% nationally from last year. Home prices are also up 6.9% nationally over last year.

In other words, homebuyers are optimistic at a time that the market seems to be favoring sellers. So, what's going on? Why are homebuyers so optimistic all of a sudden? Here are three possible explanations:

1. Lending is loosening up. Over the past several years, mortgage rates have seen historical lows. This has meant that homes are actually more affordable, in spite of the increase in prices. However, lending has been very tight. Fortunately, that’s changing. Lenders are approving mortgages at the highest rate since 2011, with 77% of mortgages for home purchases approved.

2. Jobs are looking good. At the moment, fewer homebuyers are worried about losing their jobs, according to the same Fannie Mae survey. It's not just job security that's contributing to greater optimism about buying a home. Overall income is higher, making homes more affordable by comparison. The median household currently has 150% of the income needed to buy a median home, compared to a historical average of just 125%

Lenders are approving mortgages at the highest rate since 2011.

3. Long-time renters are ready to buy.Millennials, the generation of people born after 1980, have largely opted out of homeownership until now. They have been renting for a longer time, putting them higher up on the pay scale compared to previous generations of first-time homebuyers. But now, many millennials are finally hitting an age when they are willing to commit to buying instead of renting. This is reflected in the Fannie Mae report, which states that much of the increase in homebuyer optimism comes from current renters.

What all does this mean for you? If you're looking to buy a home, all of the above reasons should give you confidence that now is indeed the right time to buy.

If you’re thinking about buying or selling a home, click the links above to search for homes on the MLS or find out how much your home is currently worth.

And if you have any questions about the Grand Rapids area real estate market, whether you're thinking of selling or buying, give me a call. I'm here to help. I look forward to hearing from you soon.