Why Millennials Are Choosing Not to Buy a Home

In 2019, millennials include young adults between the ages of 23 and 38. As a generation, they get a lot of slack about their purchases, and they’ve actively been changing all industries in big ways, especially the home buying industry.The American Dream has always included buying a home, yet so many millennials today are finding this dream to be out of their grasp.

 

According to Urban Wire, 37% of millennials owned a home in 2015. This is 8 percentage points below the rate for Gen-X’ers and baby boomers when they were in the same age range. While we like to talk about the economic disadvantages of the millennial generation, this is only one side of the story. Yes, the economics of home buying play a large role, but there are also other factors as to why millennials are choosing not to buy homes today.

 

 

1. Financial Challenges

First, it would be impossible to discuss millennial home buying trends without taking finances into consideration. We all know that millennials are in a dire financial situation as a whole. With the highest levels of student debt we’ve ever seen, millennials are also notoriously underemployed. This means they’re finding it hard to make a fair living at the same rate as the generations before them.

 

Many millennials choose to live in less expensive accommodations, such as sharing an apartment with friends or living from home longer than past generations. Ultimately, many young people today are simply not in a position to save enough to afford a home between students loans, low income levels, and the rising costs of living.

 

 

2. Delayed Marriage

As mentioned earlier, the financial challenges are only one side of the home buying story. Millennials are also choosing not to buy a home right now because many are not married yet. According to a recent eHarmony report, millennial couples are together for an average of six and half years before they get married. That’s significantly longer than any past generation.

 

The fact of the matter is that while generations of the past were ready to settle down in their early twenties, this is no longer the case. Young people are also delaying when they have kids, many choosing to establish their careers and their relationships before buying a house.

 

 

3. City Living

Millennials are generally a very urban generation. The lack of entry-level positions in many parts of the country sent young people heading towards the bright lights of big city living. These cities bring more urban amenities and job prospects, but they also have a higher cost of living.

 

Purchasing a home in an urban center is a big financial challenge. Not only are less properties physically available, but they tend to be priced higher or need more work. While older millennials are more likely to move outside of city centers, finding affordable housing is still a challenge.

 

 

4. Lending Challenges

Finally, it’s not as easy to get a mortgage as it was in the past. After the 2008 housing crisis, banks have taken a stricter approach to lending in order to reduce their risk. It now takes longer to accumulate the 20% down for a home. While there are programs that make it possible to buy a home with a lower down payment, these come with higher interest rates.

 

Because millennial are less likely to afford the 20% downpayment on a home, they’ll be expected to pay for private mortgage insurance, making those monthly payments even more expensive. Since most young people began their careers when the economy was at its worth, they don’t usually have extensive savings to rely on.

 

 

Conclusion

Millennials are choosing not to buy a home for a number of reasons. As you can see above, this change runs deeper than just financial challenges. There are also cultural shifts like choosing to get married later that also lead to young people waiting to buy a home.

Ultimately, most millennials still do have a goal of homeownership. Yet, they’re willing to wait until they’re in a better financial position and ready to settle down before they take the plunge.

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What Is HOA and How Much Does It Typically Cost?

You just moved into a new location and now you’re seeing HOA on some documents you’re receiving. You’re probably wondering how did I get this far and not know what an HOA is? Well, let’s lay it out.

 

 

What is HOA?

Homeowners Association, or HOA, is an organization in your neighborhood that makes and enforces rules for the properties that are within its jurisdiction. The homeowners that purchase a property under an HOA now fall under their rules and fees. The HOA doesn’t just bark but they’ll bite when they need to.

 

The HOA can have serious legal power over the homes that fall in their jurisdiction. The HOA has a board of members that are elected who are in charge of overseeing and enforcing rules. They might take up an issue with major things such as certain landscaping or smaller things such as changing the color of your door. To do any serious changes to your home you’re probably going to have to submit an application to your HOA. Failure to comply can result in some big charges.

 

 

What Does HOA Charge?

Depending on the size, location, amenities, of where you are staying it will vary. Most likely your property will fall within the range of $100 to $400 per month. Some high-class locations charge up to $4,000, but for that price, you practically get a butler that’s ready to serve. This money goes to maintaining the amenities as well as saving for any emergencies or special projects the community may need (fixing potholes, adding new parking, new pool).

 

An area the HOA might charge you is if you’re not complying with the rules. Another fee might be a special project they hope to accomplish through extra charges in the neighborhood, such as parking lots and sidewalks.

 

 

Downsides of HOA

Well, obviously the extra monthly charge isn’t something many people love or can even afford after rent. Some homeowners think the HOA is too harsh with their restrictions and that their policies hold back the uniqueness of a house. To get approved for renovations the HOA board has to approve, which can be grueling at times.

 

 

Benefits of HOA

The HOA will make sure that the properties maintain a certain level of excellence. This means anything that might lower the property value of neighboring houses will be shut down quickly. Sometimes they will provide snow removal and trash pick up as well as law services. The HOA management services may provide amenities such as landscaping, pools and tennis courts that are available for all the HOA members. The community standards should support stable property values.

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What To Consider When Hiring A Roofing Contractor

Whether it is to remediate to damages made by a big storm or general wear and tear, most homeowners have to choose a contractor to repair their roof sooner or later. It can be an expensive and daunting project and selecting the right professional for the job is essential.

 

Here are some tips to consider when hiring a roofing contractor and some questions you must ask them to avoid a bad experience.

 

1. Does your roofing contractor have a good reputation?

Word of mouth from local people is often the best way to hire any contractor. However, don’t forget to do your homework and check the reputation of the professional you are considering through other ways. You can google their name online to find reviews of previous clients and check with organizations like Better Business Bureau.

Before hiring anyone, it is a good idea to obtain quotes from at least three different contractors.

 

 

2. Is your roofing contractor insured?

A contractor and his crew should have $1 million in insurance for general liability. It will protect not only your property but also if someone gets hurt while working on your house. Don’t hesitate to ask for a certificate of insurance and contact the insurance coverage with the company listed directly if you have any doubts.

 

 

3. What is your roofing contractor’s professional experience?

Some states require roofing contractors to be licensed. Do your research, and if applicable, require that the roofing contractor shows you his license and verify its status with the state (it can be done online in most cases).

Roofing is not something that you can improvise and requires an extensive experience in several types of roofing to be able to face any issues. A good roofing contractor should be in business for several years and be able to show you a portfolio of previous jobs with references.

 

 

4. Does your roofing contractor offer a warranty?

Many roofing issues do not appear until the roof is put to the test, sometimes weeks or months after the job is completed. Ask any prospective roofing contractor what type of warranty they offer in case any problems should arise later on.

 

A roofing contractor should come back to your home promptly, inspect your roof and decide on the best solution for any problem that may come up: this is a workmanship warranty. He should also stand by the product he uses and replace it if it is defective: this is a manufacturer warranty. A trustworthy contractor should offer both.

 

 

5. What will be included in the contract?

A roofing contractor you are considering working on your home should be able to draft a contract including the following elements:

• Timeline for the job
• Materials to be used
• Description of the job to be done and the contractor’s responsibilities, including cleaning
• Payment details

 

 

6. How can you contact your roofing contractor?

Ask if your roofing contractor will be doing the job himself or if he will be hiring a subcontractor. It will be a lot easier to work with someone that will be working on your roof directly. He should also be responsive and offer more than one way to get in touch with him if needed. 

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Is Installing A Drip Water System for Your Garden Worth It?

A drip water system, also known as a drip irrigation system, is an effective way to save both money and time while maintaining your lawn or garden. It’s a low-pressure and low-volume watering system which delivers water through either a drip, spray, or stream.

 

A drip water system uses less water than other types of irrigation techniques, and it takes a lot less maintenance. Even better, the system is easily hidden under mulch so it looks great in your yard or garden. Is this system right for your home? Let’s take a closer look.

 

 

What Is a Drip Irrigation System?

First, let’s make sure you understand how this drip system works and why it’s different from other irrigation options. In most parts of the country, you need to take a hands-on approach to keep your yard watered throughout the year, especially in the summer months.

 

A traditional sprinkler system will get the job done, but it will also eat up a good deal more water. If you live in a water-conscious area, a drip irrigation system will do the same job with less water.

 

A drip irrigation system uses micro irrigation tubing that has plastic nubs, known as emitters. These emitters drip water out at a regulated pace that you’re able to control. The emitters don’t clog, and the tubing itself snakes around your plants and trees to make sure everything is watered directly at the root. There are different types of accessories that can be used for different types of plants to help your garden thrive.

 

 

What Gardens Are Best for Drip Water Systems?

Now that you know why drip irrigation is a great way to effectively water your yard or garden without wasting resources, let’s discuss which gardens are the best fit for this system. While many yards can benefit from a drip water system, it might not be worth installing in your home depending on the design of your yard.

 

Here’s when you should consider a drip water system:

• You have a smaller yard or only wish to water individual plans
• You live in a water-conscious area or are experiencing a drought
• Your yard uses a lot of mulch which is better at soaking the soil
• You’re prepared to install a custom system

 

If you have a larger area to cover, it might be more effective to opt for the traditional sprinkler system. Drip irrigation might be possible for a smaller, garden area, but it’s impractical for a large, expansive yard.

 

Installing a drip water system is also a bit more complicated than hand watering or using a sprinkler. You’ll need to customize the tubing to specifically water your unique plants depending on the layout of your garden. This could be tricky if you’re not familiar with irrigation methods.

 

 

Deciding to Install a Drip Irrigation System

With 40 out of 50 state water managers expecting water shortages in the next few years, we all need to be more serious without water consumption. At the end of the day, installing a drip water system for your garden is an effective way to create a healthier garden without sacrificing the environment.

 

While it might not be the best fit for every home, it’s a great option for smaller gardens and those who want to go the extra mile for water conservation. Once installed, drip irrigation systems are easy to control and maintain, plus they do wonders for your garden.

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What Qualified Residential Mortgage Is and How It Works

A qualified residential mortgage is a type of home loan characterized by its comparably stable features.  These features are designed to facilitate the home-seeker’s chances of affording the loan and paying it off in full across posterity.  The party lending the money is required to make a sincere effort to gauge whether the home-seeker is able to repay the mortgage before taking out the loan.  This rule is referred to as the ability-to-repay rule. 

 

 

Qualified Residential Mortgage Requirements

The logic in requiring somewhat strict requirements for a qualified residential mortgage is that millions of homeowners were burned by the sub-prime mortgage fiasco in the mid-to-late aughts.  The risky loan features inherent to sub-prime mortgages are not allowed with qualified residential mortgages.  As an example, this type of home loan does not permit borrowers to make balloon payments.  Balloon payments are those exorbitantly large payments made toward the back end of the home loan term.  Balloon payments are permitted under specific conditions for loans provided by small lenders yet they are not characteristic of qualified residential mortgages.

 

Qualified residential mortgages do not permit negative amortization as it has the potential to dramatically increase the home loan principal as time progresses even though the borrow makes the required payments.  Even the interest-only period in which the borrower pays strictly the interest is disallowed.  The logic in forcing borrowers to pay down the actual home loan balance is that those who merely pay the loan’s interest often end up defaulting on the loan or missing payments.

 

 

Why Qualified Residential Mortgages are Gaining Popularity

A qualified residential mortgage loan term does not extend beyond 30 years.  Furthermore, there is a limit to the portion of income that can be attributed to the borrower’s total debt including the home mortgage.  If you do not meet the threshold for the debt-to-income ratio, you will not be eligible for a qualified residential mortgage.  Borrowers rave about the fact that qualified home mortgages do not require exorbitant upfront fees or points.  Secure this type of home mortgage and the points and fees charged by the lender will be capped at a specific amount.  Such limits hinge on the size of the loan.  However, some charges are not included in the limit. 

 

 

Qualified Residential Mortgages Protect the Lender

If it is determined your debt-to-income ratio is sufficient to qualify for this type of home loan, the lending party will enjoy some important legal protections of note.  The lender will not be able to extend such a loan unless the borrower proves he or she can repay it.  Though qualified residential mortgage lenders are provided with ample protection, it still might be possible to put up a legal challenge if you believe the lender did not perform its due diligence to ensure you had the financial ability to repay the mortgage in full and on time. 

 

 

Qualified Residential Mortgages and the Dodd-Frank Act

The Dodd-Frank Act mandates home loan lenders bear 5 percent of the credit risk.  However, if the loan in question is a qualified residential mortgage, it is exempt from this rule.  It is interesting to note half a dozen federal regulators have suggested a new rule that might soon define this type of home loan as one that requires a minimum of a 20 percent down payment.  It is certainly possible the credit standards for a qualified residential mortgage will tighten at some point in the future.

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What To Do If My House Has Radon

Radon is an incredibly dangerous gas that can make its way into your home through cracks, small gaps, or through your home’s water system. As radon is present in almost any type of soil, most homes are at risk of radon traveling upward through the soil and into the home.

As radon is odorless, colorless, and tasteless, you wouldn’t be able to know whether or not your house has this radioactive, cancer-causing gas without testing for its presence. While it typically takes years of exposure for radon to cause health issues, it isn’t uncommon for radon to go undetected long lengths of time.

Since this gas is relatively common and can have serious health implications, you should know how to test for it and what to do if you find it in your house.

 

 

Test for Radon

You can perform, short-term, long-term, and continuous to determine your home’s radon levels.

Short-term tests are a good first option. These tests usually measure radon over a period of two to seven days. Typically, you have to mail the test in to get your results. These tests are generally used to determine if long-term testing is needed.

Most long-term tests use alpha particle tracking to measure radon level for anywhere from 90 days to an entire year. Since radon levels can vary often and significantly, it’s important to use long-term tests to be sure whether or not your home’s radon levels are acceptable. According to the EPA, a radon level over 4pCi/L is not acceptable and needs to be mitigated.

Lastly, continuous tests can be used for either short-term or long-term tests and show you your home’s ongoing radon levels.

 

 

Seal Vulnerabilities

First, you can try to lower the radon levels in your house by sealing areas where it may be entering your home. This likely won’t drastically reduce the amount of radon in your home but can help slightly.

Try using caulk to seal cracks in your home’s foundation and walls. You can also try using polyurethane plastic sheeting to cover soil beneath your house.

 

 

Hire a Licensed Radon Mitigator

If your home’s radon levels are high, it is recommended that you hire a licensed radon mitigation company to reduce the radon levels in your home.

Doing this requires specific knowledge and skills. In fact, many states require that this task is handled only be registered and licensed professionals.

While DIY solutions might seem appealing in order to save money, for your safety and peace of mind, you should seriously consider hiring a licensed contractor to ensure that your home’s radon levels are reduced to a safe level.

 

 

Mitigation System

The most popular radon mitigation systems generally involve using fans or PVC piping to draw the gas from under your house and reroute it to outside of your home. These systems usually cost anywhere from a few hundred dollars to over one thousand dollars to install but are very effective in reducing radon levels.

Once your home has been treated, be sure to retest your home to ensure that radon levels are at an acceptable level.

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Tax Breaks That You May Have From Owning A Home

Owning a home is enjoyable for reasons beyond enhanced privacy and additional space.  Some people buy a home to take advantage of the many tax breaks provided to homeowners.  However, plenty of those who rent an apartment or live with their parents are unaware these tax breaks exist.  Once you know about the many different tax breaks available for homeowners, owning your own place seems that much more financially feasible.  Without further adieu, let’s take a look at the tax breaks available for homeowners.

 

 

Property Taxes are Deductible

Homeowners are legally permitted to deduct the property tax the lender pays on their behalf.  Though tax reforms have limited the amount of local and state taxes that can be deducted, most tax filers can deduct upwards of $10,000 worth of property tax on their tax returns.  If the property taxes are paid by way of an escrow account with the lender, meaning they are tacked onto the monthly mortgage payment and subsequently paid by the lending institution, the aggregate tax paid will be displayed on the IRS Form 1098.  This deduction can be directly deducted from your end-of-year taxes.  Those who pay taxes to their local municipality must keep a record of the money paid for end-of-year tax purposes.  Finally, it is even possible to deduct taxes reimbursed to the seller if that party prepaid while owning the property.

 

 

Deduct the Interest on the Home Loan

The interest paid to the lending bank or other financial institution can also be deducted from your end-of-year taxes.  Count every penny you paid in interest throughout the year, deduct it from your taxes and you will find owning a home is not as expensive as initially assumed.

 

 

Deduct Private Mortgage Insurance Premiums

Private mortgage insurance or PMI for short, is the insurance coverage lending institutions often require home buyers to purchase if putting 20% or less down when buying the property.  The purpose of this insurance is to protect the lender against default.  Those who itemize and have an insurance contract that started after 2006 will be able to deduct their PMI.

 

 

Deduct the Closing Costs and Points

Closing costs are an inevitability when purchasing a home.  Such costs are those borne when processing the home’s sale.  There are also fees required to check the property’s title.  The lender charges points to boot.  There are even some fees to for property appraisal, drafting the contract and recording the sale.  Unfortunately, plenty of homeowners are unaware of these fees.  Some fees are attributable to the new home’s cost basis yet some can be deducted in full while others are eligible for partial deductions. 

 

In regard to the fore-mentioned lender origination points, a single point is equivalent to one percent of the mortgage.  Deducting points has the potential to be somewhat complicated.  When in doubt, consult with your tax specialist to ensure all of the proper deductions are accounted for.

 

 

Tax Incentives for Energy-efficient Upgrades

Though many of the tax breaks for making your living space energy-efficient are no longer available, a few still remain.  Homeowners who add solar panels for electricity and/or water can claim tax deductions all the way through 2021.  However, these tax breaks gradually decrease as time progresses.  The law states 30 percent of such expenditures qualify for the credit if installed before the first day of 2020.  This percentage decreases to 26 for those who have the installation performed in 2020. 

 

 

Tax Deductions for Aging in Place

SeniorLiving.org states aging in place is defined as an individual who makes the conscious decision to remain in his or her home for as long as possible.  The addition of supplementary services to enhance living conditions and ensure a high quality of life qualify can be deducted from taxes.  In a nutshell, any aspect of your home that you spend money on to help with the aging process is tax deductible. 

 

As an example, the money you spend to add grip bars to your bathtub or install a wheelchair ramp to ameliorate home access are tax deductible.  Even the money you spend to lower the height of cabinets for easier access can be deducted.  If you have any questions as to which home improvements are tax deductible, discuss the nuances of tax laws with your accountant or another tax professional. 

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