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Is Overpaying Your Mortgage a Good Financial Strategy?

Most people pay the minimum amount due each month toward their mortgage, taking either 15 or 30 years to pay off the loan, depending on the original terms. However, if you can afford to pay more—even just a small amount—it can make a big difference in your finances.

Sending the Extra Money
One way to pay more money toward your mortgage is to slightly increase your monthly payment by $20-50. Simply add this amount to your check or online bill payment. This method is ideal because it allows you to be more flexible; for example, if you need that extra money for an unexpected expense, you're not committed to paying it toward your mortgage.

Another method you can use to pay more money toward your mortgage is to set up biweekly payments. In this scenario, you pay half of your mortgage every other week (this method is especially ideal if you are paid biweekly). Paying biweekly results in a full extra payment per year (26 half-payments per year equals 13 full payments).

It's important to note where the extra money goes when you overpay your mortgage. Each mortgage plan applies this money in different ways, which produces different results. If you apply the extra money to your principal balance, this helps you pay off the mortgage faster. However, some companies apply the extra money toward your next payment only, which means that you'll pay off the same amount of money over time. You should be able to tell the company where you want to apply your money, but don't assume that they're doing what you want.

Effects of Overpaying
When you pay extra toward the principal of your mortgage, you are decreasing the total amount of interest that you pay over the lifetime of the loan. Traditionally, when you make your payments during the first few years of the mortgage, the bulk of your payment goes toward interest rather than principal. Paying extra each month can save you thousands of dollars on your total cost over the full term of the loan.

Prepayment Penalties
One potential negative effect of overpaying your mortgage is having to pay a prepayment penalty. Certain mortgages have this type of clause to protect the bank from losing money. If you pay your loan off too quickly, you may have to pay extra money to the bank. It's usually still less than what you would have paid if you followed the loan terms. Check with your mortgage company about its policy on prepayment penalties.

5 Things Mortgage Lenders Like to See

Job Stability
The lender needs to see signs of stability. Don't make any sudden changes in your employment if you're planning to apply for a mortgage soon-stay at your job for well over two years.

Low Credit Card Debt
Your back-end debt-to-income ratio plays an important part in getting approved for a home loan. This ratio is the total amount of debt payments you make each month divided by your gross monthly income. It should ideally be under 36 percent, but to increase your chances of getting approved for a home loan, work on getting that percentage below 30 percent.

No Charge-Offs
A charge-off is the worst thing to have on your credit report because it means all the creditors attempts to come to an agreement regarding the debt has been ignored. Call all outstanding creditors and collectors in advance to come to a compromise regarding the debt as soon as possible-don't wait until a potential mortgage lender is pulling your credit report to find the negative items.

A Home Within Your Budget
Along the same lines with minimizing your debt-to-income ratio, you should also minimize your potential monthly housing expense as a percentage of income (the front-end ratio). Your front-end ratio shouldn't exceed 28 percent, so to improve your chances of getting approved, choose a home that puts you closer to 20 to 22 percent.

Money Saved Up
Loans with little money down are more difficult to get. Increase your chances of getting approved by saving up for at least 10 to 20 percent down.

Boost Your Home's Appeal with These Backyard Accents

A lot is said about curb appeal when listing your home for sale, and the outward appearance of your property is important. What many home sellers do not know, however, is that the backyard can be even more enticing to would-be buyers. A beautifully manicured lawn and perfectly landscaped exterior will draw buyers in, but what they see in the back of the home may close the deal. Adding these simple touches to your backyard can make your home more appealing, and help it to sell faster.

A Fire Pit
Adding a fire pit to your backyard expands your entertaining possibilities and extends the outdoor living season into the cooler months. More home buyers are looking for pre-installed fire pits, and having one in your backyard can boost your home’s backyard appeal. Install a fire pit that is an appropriate style and size to enhance your backyard space. If your home’s appeal is luxury, then choose a high-end model.

Solar Lighting
Modern buyers are looking for green solutions to their outdoor lighting problems, and nothing is greener than a set of dusk-to-dawn solar lights. Solar lights are inexpensive to buy, easy to install, and they can go almost anywhere. If your home has a rear deck, line the perimeter with solar lights to enjoy pleasant nights grilling, entertaining or just hanging out with friends. A solar spotlight in the backyard can also help keep the property safe from burglars.

Container Garden
This is an easy addition you can make to your backyard deck and patio space. All you need is a few attractive, properly-sized planter pots and a bit of creativity. Intersperse edible plants and ornamental ones so you can enjoy beautiful flowers and fresh vegetables from your container garden.

3 Things to Consider before Accepting a Cash Offer

The cash buyer outranks the financed buyer because there is a lower chance of the deal falling through and because, typically, a cash buyer can close faster than a financed buyer. These are attractive benefits in some situations. Yet there's more to a home offer than a finance contingency and the closing date. In general, there are three things you should scrutinize before accepting a cash offer for your home:

1. Source of the Cash
Of course you need to verify that the cash buyer has the cash he says he does. But it's not just a question of how much cash the buyer has, but also what type of cash he is holding. A buyer needs liquid cash-enough money in the bank to cover the balance of the purchase price and closing costs. That's potentially hundreds of thousands of dollars that the buyer must deliver in the form of a bank or cashier's check at the closing. A buyer who needs to sell a property to raise the cash is as great a risk as a financed-buyer, as there is a chance that they will not be able to sell their current home on time.

2. Other Contingencies
A cash offer contains no finance contingency but that does not mean the offer is contingency-free. Most buyers reserve the right to appraise and inspect the property before closing and to withdraw from the contract if the inspection reveals any major repair issues. If an inspection reveals any problems, you will have to carry out the repairs and/or renegotiate the purchase price. For this reason, a cash transaction may not proceed any faster than a mortgage-financed purchase, and there is still a chance the deal will fall through.

3. The Bottom Line
Some cash buyers, especially investors, make a low cash offer because they are cash buyers. They effectively charge a premium because there is zero risk of the bank refusing the buyer's loan. This may not represent the best deal for some sellers, especially those that need the sale proceeds to purchase a new home.

Weighing Your Options
If you are lucky enough to receive more than one offer, and at least one of those offers is cash, the real question for you to ask is: how risky is the financed offer? The most telling answer to this question comes from the buyers themselves; specifically, what action they have taken towards securing the necessary financing. A financed buyer who holds a quality preapproval letter, provides a good down payment and has reliably paid a mortgage in the past likely will get his loan. These qualities render his offer as strong as or stronger than the cash offer, particularly if he offers a higher price. The trick is to look at the deal holistically and not be swayed by the word "cash."

Make Your Yard Sale a Success

Holding a yard sale or garage sale is like going into business for a day. It can be fun and wildly successful, or it can be pure drudgery and a waste of time. Don’t go to the trouble without reading these tips to make your sale a success.

Join Forces with Friends
A lot of "stuff" in a sale is always more enticing than sparse offerings. A yard sale requires a lot of energy, lifting, moving, and time for details, so the more helpers you can gather, the better. It’s also a lot more fun!

Research Rules
Your neighborhood may have rules concerning when or how long you can hold a yard sale. Is there an annual neighborhood garage sale you can join? You may also need a permit from the city.

Advertising Is Important
The extent of your advertising depends on your location. The more remote your location, the more advertising you need. Make use of newspaper classifieds, online community boards like Craigslist, neighborhood signs, and word of mouth.

Begin Collecting
Start collecting things weeks before the sale so you have time to make decisions (don’t sell grandma’s wedding brooch!), and gather supplies like tables, shelves, hangers, bags, and spare change. If you are in doubt about whether something will sell, put it out there. Even broken appliances have value for their parts.

Be Ready to Make Deals
You’ll sell more if you are willing to bargain, because shoppers love yard sales for that very reason. You can remain firm on items if you like, but if your goal is to get rid of junk there are several ways to do it:

? Designate a charity as the recipient of all or part of the proceeds-people are more willing to buy if they know it’s for a good cause.
? Make up bags or boxes of similar items and put one price tag for everything.
? Toward the end of the sale you can lower prices, offer two-for-one deals, or let shoppers fill a bag for $1, $5, or whatever seems to be a fair price.

Don’t forget the details, such as providing extension cords to test appliances and making a plan for rain.

Tips to Hire a Contractor You Can Trust for Home Repairs

Hiring a contractor can be a process fraught with anxiety. Take a few precautionary steps to ensure that you're getting a trustworthy contractor who does high-quality work.

1. Ask for Referrals
Reputable contractors do not knock on doors to solicit work. The best source of recommendations is talking to people who have had similar jobs done. This can be as simple as asking friends and neighbors if they can recommend someone.

2. Do a Background Check
Search the names of the contractor and the company online, and do searches adding words like scam and problems. Check sites like the local Better Business Bureau and Rip Off Report for complaints. Most states also have a website allowing you to check if a business is properly registered or if a person has a required license.

3. Get Estimates
Take the time to get several bids on the project. Watch out for red flags such as arriving late, appearing disorganized or dirty, and making a bid without looking closely at what the job involves. Take a pass on any contractor who cannot provide references, or who claims to have references but cannot provide contact information.

Be careful of bids that are a lot lower than the other bids; this is often a contractor who either plans to use substandard materials or who lacks the experience to fully understand what the job involves. Extreme low-ball contractors are also likely to attempt to add on expenses mid-project either because they planned a bait and switch or aren't making as much as they thought they would because they underestimated the costs.

4. Get a Contract
For all but the most simple jobs, the contractor should be willing to draw up a contract. The contract should state the scope of the job, the type of materials to be used and the payment schedule: including upfront deposit, interim payments for stages of work completed, and final payments. Be wary if the contractor pressures you to sign immediately; they should be willing to wait 24 hours for you to review the contract in detail, particularly for complex jobs.

5. Don't Pay Everything Up Front
Once the contract is signed, the main leverage that the customer has is the outstanding balance due to the contractor. A deposit before work begins is usual, but should not be more than 10 to 20 percent of the total fee. More may be required for custom orders as the contractor may have to pay for specially ordered materials, but commonly used materials and tools that can be used for other jobs are normally carried on the contractor's own account.

6. Check Their Work Before Final Payment
Make sure that the job is finished to complete satisfaction before handing over the final payment. Once the contractor has all the money in hand, there is less incentive for him to return and fix things.

Focus on Curb Appeal for the Highest Return on Investment

The Remodeling Cost vs. Value Report for 2015 analyzed home improvement projects to see which would give homeowners the biggest return on their investments when it came time to sell. The top five investments that put the most cash into sellers' pockets were all visible from the curb.

Upgrade Your Front Door
Replacing an old front door with a new steel one was the most affordable renovation on the list, with an average cost of $1,230. But for the third year in a row, this simple upgrade brought buyers the greatest returns on their investments; the resale value of a steel door upgrade averaged $1,252, a return of 101.8 percent. An upgraded front door makes a home seem well-cared for, a good first impression that will stay with a buyer throughout the rest of their viewing.

Garage Door Replacements
Thanks to their large size, garage doors are the focal points of many homes. Replacing a dated, non-functioning door with a new, more decorative one will attract buyers. But sellers would be wise to stick to their budgets. A mid-range garage door replacement with an average cost of $1,595 recouped sellers 88.5 percent of their investment. A more upscale garage door, averaging $2,944 to install, only had an 82.5 percent return on investment. While both upgrades made it on the shortlist of top five renovations, sellers who didn't over-improve for their area likely saw the biggest gains.

New Trends in Siding
Fiber cement siding has been popular for years, and 2015 was no exception. Replace your old siding with fiber cement and you'll recoup 84.3 percent of its cost. But when it comes to cladding your home, siding is no longer the biggest earner. Manufactured stone veneer, with an average cost of $7,150, is cheaper to install than fiber cement, a job which costs on average $13,378. Yet stone veneer recoups 92.2 percent of its initial cost at resale time. Stone veneer is well-suited to both modern and traditional home facades, making it a trend with staying power.

Indoor Improvements that Attract Buyers
While it failed to break into the list of top five investments, a minor kitchen remodel will still attract buyers. An economical renovation with an average cost of $19,226 will recover 79.3 percent of its initial cost. Other cost-conscious renovations include replacing older windows with new windows (wood)-recouping 78.8 percent-and adding an attic bedroom-recouping 77.2 percent.


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    Introducing NVBR's 2015 Realtor of the Year, Barb Trousdale - A Note from Curtis Trousdale

    I am proud as a husband can be that on May 19th, 2015, my wife (and business partner), Barb Trousdale, was awarded “REALTOR of the Year” at the 2015 REALTORS of Distinction Awards Gala. The most revered award presented at this annual event, Barb was recognized for her exemplary contributions to our community, her professional career, and the Vermont Realtors association. Her nomination and selection is indicative to the respect that other members of the Northwestern Vermont Board of Realtors have for Barb. 

    Prior to receiving her award, a short video was played for all in attendance, and the folks on camera who were interviewed all repeated the same word when talking about Barb: integrity. Barb sincerely values integrity; she strives to maintain it in all areas of her life. Loyal to her family, friends, colleagues, clients, customers, and God, Barb also upholds the National Association of REALTORS Code of Ethics and Standards of Practice to a “T.”

    Up on stage, Barb looked lovely in her black and white dress (and the corsage I bought her) as she accepted her award. Her speech was unscripted, genuine and short; she credited her success not only on her desire to have integrity in all she does, but also due to the support from family, friends, and God’s immense grace.

    I’m so proud that Barb’s peers recognize her hard work and commitment, and I am honored to have witnessed this milestone in her career along with 25 members of our family, and more than half of our staff at Preferred Properties.

    If you are contemplating buying or selling a home, or know someone who is, you can be confident in your decision to call Barb.

    Please feel free to congratulate Barb if you have the opportunity!

    -Curtis Trousdale

    What Americans Want In a Home: The Housing Satisfaction Gap

    In a recent survey conducted by the Demand Institute, 10,000 households were asked if their current homes met their lists of must-haves. The survey found that many homeowners are going without some important features. Home buyers and renovators should take heed; these are the features that should be on every must-have list.

    Energy Efficient ?
    Spending on home electricity has climbed 56 percent since 2000, leading 71 percent of households to think energy efficiency is important. Yet only 35 percent are satisfied with their own home's energy efficiency. Homeowners are making simple improvements to save on energy, like changing bulbs to LEDs and sealing leaks around windows and doors.

    Move-In Ready?
    Since 2010, Americans have been spending more on home renovations-smart investments, since 67 percent of those surveyed felt a fully renovated home was important. Only 41 percent were satisfied with the repairs done on their own home; when asked which jobs they will be likely to tackle over the next five years, painting and replacing worn flooring topped the to-do list.

    Upgraded Kitchens
    Of all the rooms in a home, the kitchen comes out on top, with 62 percent of households declaring it an important space in their homes. Yet only 38 percent of households are happy with their current kitchens. Top-of-the-line appliances seem to be on many must-have lists, with 49 percent of homeowners thinking about purchasing a smart appliance.

    Space and Privacy
    Whether it's space around a home to afford a little privacy from neighbors or space inside a home for more storage, homeowners want more room. Privacy was important for 63 percent of the surveyed households, but only 42 percent were satisfied with the distance between their house and the neighbors. And while 55 percent felt storage space was important, only 35 percent felt they had enough room in their closets. Over the next few years, large single-family homes in suburban communities are expected to grow in popularity to meet the demand for more privacy and space.

    Over the next five years, the number of households helmed by someone over 65 is expected to grow exponentially. These aging buyers place a greater emphasis on single-story, low-maintenance homes with accessible features. But many households feel their homes won't be compatible with their aging bodies; 76 percent think aging-in-place is important, but only 53 percent are satisfied with their home's ability to meet their future accessibility needs.

    Good Investment
    Despite the recent housing crisis, 65 percent of households still think a home is a good long-term investment. However, only 47 percent are happy with their current home, a group largely made up of renters; 53 percent of renters hope to purchase a home one day.

    Spring Cleaning: An Organization Attack Plan for Your Home

    Assessing your things, organizing your space and an overall clean will make your home seem new again and help set the tone for an organized lifestyle. Here are four steps that will help you get your house cleaned and organized.

    1. Don't Set Yourself Up for Failure
    Sometimes the best spring cleaners can be overzealous and think they can attack the house in one day and be done with it. Biting off more than you can chew can lead to frustration, burnout and scrapping the project altogether. Dedicate a few hours each evening, or a few hours over the weekend for cleaning. By working through your home bit by bit, you will be more successful at an overall clean over the course of a few weeks.

    2. Clean One Area at a Time
    Don't try to clear out everything in a whirlwind. Start in one area, say the dresser, work through it, and then move on. If you get started pulling out items from everywhere and cleaning with no plan, you can actually make more of a mess than when you started! An overall assessment to make sure items are where they should be to get started is okay, but otherwise try to focus on one area at a time.

    3. Ask for Help
    If you have a friend or family member that is an organization guru or just owes you a favor, ask them to help you as sometimes it is good to have a fresh pair of eyes to review your things. There might be items that you are holding on to that someone can honestly tell you need to go. If you are lacking motivation, having a set time that you have a helper can keep you on task and make you follow through with cleaning.

    4. Have a Staging Area for Unwanted Items
    A major point of cleaning and organizing is to get rid of things you no longer need. Rather than just hiding these items in the back of your closet, make sure that you have a functional system in place to store these items while cleaning. Set up boxes and bags in a designated spot, so as you move through the home, you can toss in items that you will be getting rid of. This way you'll be ready to toss out or donate things at the end of your project rather than hold on to items you don't really need.