Let’s Make a Deal! 7 Things You Can Negotiate When Buying a Home—Beyond the Asking Price

fstop123/Getty Images

Whether you’re buying your first home or your 11th, there’s one thing we all think about when it comes time to negotiate the deal: wiggling that pesky price down as much as possible.

Of course, price is important when you’re buying a home. But it’s not the only negotiable part of the sale—there are plenty of other ways to haggle aside from list price.

“In most parts of the country, sellers often have multiple bids right now,” says Danielle Samalin, CEO of Framework Homeownership. “In this market, trying to negotiate a sales price probably won’t get you far.”

Can You Use Your Security Deposit as Last Month’s Rent? Find the Answer Here

SolisImages/iStock

Finding homes for rent can be a tricky business—but the real challenge usually comes when it’s time to move.

When you’re getting ready to end that lease, you’ll probably come up with a lot of important questions, one of which being: Can you use your security deposit as last month’s rent? This question is common among tenants vacating their apartments, and for very good reason: When you first moved in, you probably forked over a sum (typically amounting to one month’s rent) to cover any repairs that might be required on your place once you move out. Typically this deposit is returned once the landlord sees you’ve left the place in decent shape. So what’s the harm in having that deposit serve as your final rent payment so you can simply move on without all that back-and-forth?

In many ways, using your deposit as last month’s rent makes perfect sense: You won’t have to pester your landlord for the deposit, while your landlord won’t have to mail it back. Still, while this happens all the time and rarely causes repercussions, this practice can come with risks.

Using your security deposit as last month’s rent: What could go wrong?

“Tenants should check their lease, but there is a good chance it will say that it is not okay to do this,” says law professor David Reiss, research director for the Center for Urban Business Entrepreneurship.

The reason is simple: “The landlord wants the security deposit to cover, among other things, damage to the property,” Reiss explains. “If the security deposit is used for last month’s rent, it will no longer be available for any other purpose.”

If you leave your apartment in good condition, then your landlord is unlikely to care much. However, if you leave the apartment in poor shape and there is no security deposit left to bring it back up to snuff, then your landlord might come after you to cover the cost of repairs.

Where you live, and the local laws there, can also affect how landlords react.

“You will want to know the law as it applies in your jurisdiction,” says Reiss. “Note, for instance, that the New York State Division of Housing and Community Renewal states that ‘a security deposit should not be used as a final month’s rent.'” This means landlords could easily sue you for breaching the terms of your lease.

That being said, “practically, the landlord can’t do much in the 30 last days of your lease term,” says Reiss. “No court would move fast enough.” But that doesn’t necessarily mean you’re in the clear.

Why you shouldn’t leave your landlord in a lurch

Still, even if the courts don’t catch up with you, there are other ways a landlord can haunt you long after you’ve moved out. For instance: If a new or prospective landlord asks to speak with your previous landlord and hear what kind of tenant you were, it won’t bode well if you just bailed without a trace. This could make new landlords leery of welcoming you as a tenant, which could complicate your plans to find a new place.

Plus if your old landlord does file a lawsuit, that could show up on a credit report—further damaging your plans to rent or buy a home down the road.

How to get your security deposit back the right way

Afraid you’re not going to get your security deposit back and using that as your rationalization for counting it as your final month’s rent? Actually, you’re protected there because the landlord is required to give you back your security deposit if you leave the rental without major damage. If they don’t, you may then take the issue to small-claims court yourself, or file with the Consumer Frauds and Protection Bureau.

Bottom line: A security deposit is not supposed to be rent money, so unless you’re really in a bind, keep them separate—whatever money you save might not be worth the potential repercussions.

Article by Kimberly Dawn Neumann

10 Gardening Hacks That Save Money, Time, Messes, and More

Getty Images

Think you’ve got a black thumb, and no amount of gardening advice can help keep your plants from meeting untimely demises?

We’re here to say that growing flowers and veggies is definitely an art, but it’s one you can learn fast with a few shortcuts—aka gardening hacks.

Here are some of the best gardening tricks of the trade approved by experts who say they really work. And the best part? Many of these ideas use home goods that you’ve got lying around the house already.

1. Fill your planters with bottles and cans to save dirt

By Dawn Y

Ever wonder how those ginormous planters get filled? Sure, you could use a 50-pound bag of pricey potting soil to get the job done, or you can try an easier, less expensive, and more environmentally friendly approach.

The trick here: Fill the pot about two-thirds of the way with cans or plastic bottles from your recycling bin, then pile the dirt on top. This way, you use far less costly soil from the garden center, plus you improve the aeration and drainage at the bottom of the planter. Oh, and you can move it around your patio more easily, too.

2. Divide your bulbs in half for more flowers

Photo by The Garden Concierge, Inc.

This one’s a two-fer: You can double your garden’s beauty and save money simply by dividing annual bulbs. (Tulips, irises, and daffodils are ideal for this.)

“When you see your flowers aren’t producing the way they used to, yank them up and then carefully pull the small, offset bulbs away from the base of the plant,” says Susan Brandt, master gardener at Blooming Secrets.

Plant these new bulbs, plus the original one if it seems in good shape (it’s worth planting again if the base is firm to the touch), and you may double your blooms without spending more money.

3. Take your soil’s temperature with a kitchen thermometer

Photo by Oregon Scientific

That oven and grill thermometer isn’t just for your barbecues and Thanksgiving turkey. Yup, you can actually stick it in the dirt to determine whether your soil is warm enough (meaning above freezing) for planting. A standard meat or digital thermometer will work as long as it tests colder temperatures in the 40-degree range, says Brandt.

4. Line pots with coffee filters for easy repotting

Photo by Lauren Kelp

Transferring plants to new pots or into the ground is a tricky project. The reason? Dirt can drop all over when you try to lift them out, and disturb their delicate root system. The fix here is run-of-the-mill coffee filters.

Place one at the base of your pot, fill with dirt and plant your seeds or plants right in this paper nest.

“And when you go to repot it, lift up the filter gently and evenly so it keeps loose soil from spilling on your workspace,” says Brandt.

5. Use zip or twist ties to keep climbing vines in place

Photo by Sylvan Gardens Landscape Contractors

A gorgeous grid of climbing clematis or other vines is easily achieved by grabbing a few twist ties (the ones that come with loaves of bread). Secure the vine stems to a wire backing, fence, or post, and you’ll be able to arrange the growth in any way you like.

6. Crush egg shells and mix with your soil

This gardening hack has some science behind it.

“Eggshells are an excellent source of calcium, and you can use them as fertilizer in areas with clay soil,” says Brandt.

When planting, add a little pulverized shell to each hole, suggests Oscar Ortega, maintenance care manager at FormLA Landscaping. These delicate wonders also contain potassium, magnesium, and phosphorus, which can help perk up house plants, too. (Sprinkle some in the dirt every couple of weeks.)

7. Fill an over-the-door shoe holder with plants

An old shoe holder is easily made into a pocket planter for succulents, ivy, or any perennial you want to showcase. Poke a few small holes in each section for drainage, add dirt and plant seedlings or small plants, and then hang it on a fence, shed wall, or any exterior door that gets good light.

8. Insert plastic utensils to scare off critters

Beware of those mean plastic forks!Flickr via Recyclart

Brandt isn’t sure why this one works, but theorizes that this small army of plastic forks standing sentry in the soil scares off rabbits and birds since it looks so unfamiliar to them. Save a few from your next picnic and try it!

9. Pour vinegar on weeds

Who doesn’t have a cabinet full of random vinegar bottles? The acid in this pantry staple kills weeds like dandelions, so douse a bit on each garden offender. You’ll have to put up with the sharp scent for a little while, but it’s a fair trade for weed-free flower beds.

10. Trap slugs and pill bugs in beer

While you might hate to share your suds this way, by putting a small dish of PBR near your plants you can catch and kill slugs and other slimy bugs. The reason: They’re attracted to the sweet odor of beer—and when they get close to it, they end up drowning. RIP!

Article by Jennifer Kelly Geddes

Spring Chicken Pot Pie 60 minutes

60 minutes · Serves 6 · These Spring Chicken Pot Pies have All of the Spring Veggies, Tender Chicken, and Crisp Puff Pastry. Easy spring recipe!

Ingredients

  • 2 tablespoons butter
  • 1 large leek, white and light green parts diced (about 1 cup)
  • 1 1/2 cups carrots, diced
  • 1 cup radishes, diced
  • 1 cup asparagus, diced
  • 3 tablespoons flour
  • 1 cup homemade or low sodium chicken stock*
  • 2 teaspoons salt, plus more to taste*
  • freshly cracked black pepper, to taste
  • 8 ounces mascarpone cheese
  • 2 cups diced or shredded chicken
  • 3/4 cup frozen peas
  • 2 teaspoons lemon zest
  • 2 teaspoons lemon juice
  • 2 tablespoons minced chives
  • 1 sheet all-butter puff pastry (such as Darfour)
  • flour, for rolling
  • 1 egg, whisked together with 1 teaspoon water

Instructions

  1. Preheat the oven to 375 degrees. Heat the butter in a large skillet over medium heat. Saute the leeks for one minute, add the carrots, and saute for about two minutes more. Add the radishes and asparagus and saute for one minute.
  2. Sprinkle flour over the vegetables and stir until evenly distributed. Add the chicken stock, turn the heat to high, and stir until it comes to a boil and starts to thicken. Season with salt and pepper, then turn off the heat. Stir in the mascarpone until it’s fully melted and incorporated. Gently fold in the chicken, frozen peas, lemon zest, lemon juice and chives. Taste and adjust seasoning as needed.
  3. Divide the filling amongst 6 small ramekins. Dust a work surface with flour and roll out the puff pastry to even out any folds and make it slightly thinner. Cut the pastry into 6 squares and cut a slit in the center of each. Place the pastry squares over each ramekin, pressing down gently around the lip and letting the excess fall over the sides. Brush the tops lightly with egg wash, then place the ramekins on a large sheet pan. Alternatively, you can pour the filling into a large casserole dish and place the whole sheet of pastry on top.
  4. Bake for about 30 minutes, or until the pastry is puffed and golden brown. Allow the pot pies to cool for 10 minutes before serving.

Notes

  • * Salt content of commercial chicken broths and stocks will vary with the brand, so start with a little bit of salt, taste, and adjust as needed
  • Author: Nicole Gaffney (ColeyCooks.com)

How a Home Appraisal From a Lender Can Make or Break a Mortgage for Your First Home or Beyond

AndreyPopov/iStock

Buying real estate often requires some serious haggling between home buyer and seller, to arrive at a price that they’re both willing to accept. But even if you reach an agreement, the negotiations may not be over. If you’re a buyer who needs a mortgage, most lenders will require that you obtain a home appraisal. So that means you’ll need to get one more opinion on how much the property is worth.

Lenders require a home appraisal before they’ll provide a loan, for the simple reason that the home serves as collateral for your mortgage. If for some reason you end up unable to make your mortgage payments, the lender will have to foreclose upon your home, then sell the property to recoup its costs. So it makes sense that it would want a home appraisal to help determine the property is worth that large chunk of change it’s handing over!

Homeowners may also need an appraisal when they refinance a home or take out a home equity loan (HELOC).

If all goes well, the home’s appraised value will end up at the price you’d agreed to pay. But the home appraiser could also report that the home valuation is higher—or lower—and this has ramifications for the whole deal.

But never fear. Below, we walk you through everything you need to know about the crucial appraisal process, and how to handle whatever appraisal results come your way.

What appraisers do

To do a home appraisal, an appraiser considers these main criteria: location, structural condition, additions or renovations, and recent sales of comparable homes, or comparable sales. Comparable sales play the most important role when determining valuation, says Rick Phillips, an appraiser and real estate agent in Vienna, VA.

“We’re looking for homes sold within the last six months that are equivalent in the numbers of rooms, square footage, upgrades, and location to the home that’s being purchased,” he explains.

If a real estate comp isn’t an exact match—which is typically the case—an appraiser will make adjustments in order to fairly estimate the market value of the real estate you want to buy.

For example, if a recently sold single-family home has four bedrooms, and the home being purchased has only three bedrooms, the appraiser will make a market-determined deduction from your home’s assessment.

A typical real estate appraisal costs around $300 to $500 and is usually paid for by the home buyer upfront. But although the appraiser is hired by the buyer, “The appraiser doesn’t represent the seller or the buyer,” says Joe Parsons, senior loan officer at PFS Funding in Dublin, CA. And although appraisers work to protect a lender from entering a bad deal, they don’t work for the lender, either. Real estate appraisers are merely there to give an unbiased opinion about the home value.

How appraisals affect the sale

If the real estate appraises for the agreed-upon purchase price, you as the buyer are one step closer to settlement. If the appraisal report comes in higher than what you’re paying, that’s even better. For example, if you’re paying $500,000 for a home and the appraiser says the appraisal value is $515,000, you’ve instantly gained $15,000 in equity.

But if the appraisal comes in lower than you’d agreed to pay for the home, that could cause trouble.

Low appraisals tend to occur in hot housing markets, where home buyers are often forced to pay above market value for a home. The only problem is that a lender won’t loan more than a home’s appraised value, which could leave the buyer to cover the difference, says Chris Dossman, a real estate agent with Century 21 Scheetz in Indianapolis. But if a buyer isn’t willing or able to pay the difference between the appraisal amount and the sales price, there are options:

  1. Negotiate with the seller. If the home doesn’t appraise for the contract price, the seller may agree to lower the sales price so the deal can go through. Dossman says this is the most common outcome.
  2. Appeal the appraisal. Sometimes called a “rebuttal of value,” an appeal involves your loan officer and real estate agent working together to find better comparable market data to justify a higher valuation. “Appraisers aren’t perfect,” says Parsons. “They make mistakes.” If you file an appeal, the appraiser will review the information and then make a judgment call on whether or not to adjust the valuation.
  3. Order a second appraisal. “It doesn’t happen very often, but it does when a buyer just absolutely has to have the subject property” and believes the first appraisal wasn’t accurate, says Dossman. The initial appraisal might be significantly off-base if, say, the appraiser overlooked a good comp or wasn’t familiar with the local housing market, especially if appraised values are rising rapidly. Granted, if the sellers are equally committed to keeping the deal alive, you might be able to persuade them to cover the costs of the second appraisal.
  4. Walk away. “It’s a bummer, but it may not be worth overpaying for a home,” says Dossman.

This is why, as ominous as the home appraisal process might seem, prospective borrowers should see getting an appraisal report as a safety measure that can help them avoid buying a home that is overpriced.

If you are refinancing your home, an appraisal prevents you from taking out a loan amount for more than the percentage of the fair market value of the home that your mortgage lender will approve.

To find an appraiser, you can ask your real estate agent for recommendations, or search by ZIP code at the Appraisal Institute.

Article by Daniel Bortz

What Does ‘Under Contract’ Mean in a Real Estate Listing?

Getty Images

As you scroll through the real estate listings, you might spot a few that say the house is “under contract.” But what does “under contract” mean?

In most cases, a property is listed as “under contract” once a buyer has made an offer and the seller has accepted. While that’s a big step, it doesn’t mean the deal is done quite yet.

So if you see a house you love that’s “under contract,” don’t give up quite yet. Here’s how to handle this scenario and maybe even get the house.

Must Love Cats! New Orleans’ Crescent City Cat Club Is Worth Meowing About

Tim Graham/Getty Images, Craig Fremin

A home usually filled with furry felines is ready for a new owner to curl up and call the place home.

Known as the Crescent City Cat Club, the home on Marigny Street in New Orleans is on the market for $550,000.

“It’s unique because it’s used as a residence and a rescue,” explains the listing agent, Samara Poché. “The property was previously used just as a residence, and the current owner decided to create a nonprofit, helping adopt cats to people who want them.”

There are two structures on the property. The main house was built in 1871 and is a converted shotgun-double. It was converted to its current use in 2017.

Most of the rooms are now totally devoted to feline friends and festooned with bright colors, fun art, and places for cats to play and be comfortable.

“She’s got a full-blown kitten room, which is really sweet. And she does have a separate apartment in the back where she lives,” Poché says. “She’s got a full staff of volunteers that come to help her there, and people can join in and visit.”

xterior of home in New OrleansCraig Fremin

Divided down the center, the main house has two kitchen areas and two bathrooms at the rear. The front of the home is where you’ll find at least five rooms on both sides devoted to cats. The rear of the house is devoted to human living space—but cats are still welcome, of course.

“It’s got a funky vibe, and it’s still kind of sweet,” Poché says. “If you like animals at all, you can see that the owner’s heart has been planted right here—and she really does love cats. It is obvious when you walk in there, because it is cats everywhere, and the cats are obviously happy there. It just gives out this happy vibe.”

Outside is what the owner calls the “catio,” where clients can hang out in a colorful space with kitties.

The cat club opened in 2017, and is the first in the city where people pay a fee to hang out and play with several cats. The cats are also available for adoption.

The owner is moving to California and is looking for someone to continue her mission.

“[The perfect buyer is] somebody that loves cats,” Poché says. “We’re already talking to some people who are cat lovers who are thinking about coming in and recreating the cat cafe.”

The house is in the Faubourg Marigny neighborhood, not far from the French Quarter.

“It’s very convenient to get anywhere you want to from there,” Poché explains. “You can walk to a big grocery store, a coffee shop, some art galleries, restaurants—everything right within walking distance.”

Poché says she has high expectations for this property.

“I hope we can find somebody who’s a cat-loving person to take over this house and continue cat rescue in New Orleans,” she says. “You just have to step outside and see that there are feral cats everywhere, and it’s the humane thing to do.”

Article by Tiffani Sherman

6 Backyard Design Rules You Should Break in 2021

Getty Images

By now, the birds are chirping, flowers are blooming, and cloudless sunny skies are ahead. Warmer weather means more people will be spending time outdoors—and there’s no better time to rethink your backyard design and try something new.

“While confined to our homes in 2020, many of us had to recreate a sense of normalcy using any extra space we had. An empty backyard provides the perfect canvas to paint a new reality,” says Ashley Renne Nsonwu, host of the show “Ashley Renne” on Smart Healthy Green Living streaming service.

The way you decorate your yard is definitely a personal preference. If you like your barbecue grill front and center, then by all means go for it. But if you’re looking to push the envelope with your outdoor decor, our experts have some suggestions.

Rule No. 1 to break: Neutral is best

Different-size paversBelgard

Who wants a bland outdoor space? Our experts recommend experimenting with color, pattern, and texture.

“Today, there are more options than ever to create interesting patterns on the ground using different-size pavers, whether they be three-piece, single, or mixed,” says Joe Raboine, director of residential hardscapes with Belgard. “Add in contrasting inlays or borders, and your outdoor living space can be transformed into a work of art.”

He recommends following the rule of three by limiting mixed items to no more than three combinations.

“Once the layout for the pavement is complete, bring those same elements up into the features such as fireplaces, kitchens, and walls,” says Raboine.

Rule No. 2 to break: Your lawn should take up the most space

Let’s face it, the lawn has traditionally been the crowning glory of a backyard. Not so much anymore!

“People are shifting away from the idea of an unused lawn. In 2021, turn that manicured lawn into a functional, outdoor sanctuary,” says Nsonwu. “You can use your yard to grow food, compost, collect rainwater, and attract pollinators. You can create an outdoor yoga/meditation space, kids play area, alternative work environment for your Zoom calls, socially distanced seating areas for visiting friends, or even a greenhouse.”

Rule No. 3 to break: Manicure your shrubs and trees

Photo by Hendricks Construction

Tailored backyards are so yesteryear. In a postpandemic world, formal outdoor spaces with perfectly manicured shrubs and cookie-cutter trees have to go.

“We want spaces that feel natural, not curated. Sprinkle trees and shrubs throughout your backyard to elevate your space sculpturally,” says Nsonwu.

“When playing with your yard design, try to evoke that same sense of wonder you get while walking through lush forests, wild deserts, or untamed fields,” she adds. “Invite your woodier plants to mix and mingle with your flowers. This will create a more dynamic ecosystem for wildlife and a deeper sensory experience for you.”

Rule No. 4 to break: Outdoor living is only for daytime

Add backyard lighting.Belgard

Outdoors is the new indoors, so design your backyard space for enjoyable evenings in. The key element for a livable backyard that can be used at night is lighting.

“LED lighting has made it simpler than ever to add outdoor lighting,” says Raboine. “These lights can be incorporated throughout the landscape and can be controlled with apps. You can even change the light colors with the seasons and holidays.”

Rule No. 5 to break: Keep it simple

“Outdoor living spaces aren’t just for barbecuing and relaxing,” says Raboine. Outdoor games are more popular than ever, so consider rounding up a few for your backyard.

“Add a feature like an outdoor chess set, cornhole, a pool table, or a bocce ball court,” he adds. “Not only will these look great, they will be engaging spaces that will make your backyard the place to be.”

A permanent feature like a bocce court can also add value to your home in case you ever want to sell.

Rule No. 6 to break: Exotic plants are a must

Photo by C&H Landscaping

With sustainability being such an important issue, people are clued in to how their purchasing decisions can affect the planet, and that includes the plants you buy for your backyard. Exotic plants may look fabulous with their colorful, sculptural blooms, but they can do more harm than good in your backyard. They may be detrimental to native plants and wildlife and can require more maintenance (and more resources, like water and artificial sunlight) to keep them alive.

“A more earth-friendly approach to gardening means turning to native plants to dress up your backyard rather than invasive, exotic ones,” says Nsonwu. “Find native plants from your local nursery that work with your desired aesthetic. They are essential to keeping the ecological system from going out of whack, whereas exotic plants cause a loss in biodiversity.”

Article by Anayat Durrani

A Beginner’s Guide to Painlessly Going Green

BHHS-Chicago

You’ve heard the warnings about global warming, you feel compassion for stranded polar bears and you worry about overwhelming the landfills. As a homeowner, you may not be ready for composting, but there are ways to become an eco-friendlier household.

Ecologists provide simple but useful tips that even the laziest activist can use to do their part in helping the environment:

Cut down on water use. Turn off the tap while brushing your teeth. Drink tap water in reusable containers instead of plastic bottles. Lower the water level when doing small laundry loads and don’t run the dishwasher until it’s full.

Use less power. Shut off the lights before you leave in the morning, and unplug electrical equipment that you aren’t using during the day and while you sleep—especially your work and home computers.

Adjust the thermostat. Set it for a few degrees higher in summer, and a few degrees lower in winter. You likely won’t feel much of a difference, and you’ll like the decrease in utility bills.

Replace your light bulbs. Sources say if every American household replaced one regular lightbulb with a compact fluorescent bulb, the pollution reduction would be equivalent to removing one million cars from the road.

Change your shower-head. A low flow version will save water while providing just as much pressure.

Save on paper. Keep a digital calendar and notes instead of paper ones. Whenever possible, re-use the back side of old printed sheets for new but less important print jobs. Sign up for paperless billing and pay your bills online.

Use less plastic. Use reusable grocery bags even where they’re not required. Re-use empty plastic food containers with tight fitting lids, such as cottage cheese containers, for leftovers and storage purposes—be sure any unwanted plastic goes into the recycle bin.

Eat less meat. If you’re not ready to go vegetarian, try committing to a meatless dinner once or twice a week to decrease the resources you use. Producing wheat and even veggies takes far less water than producing beef, and there are plenty of tasty meatless recipes online that families can explore together.

How to Shop for a Mortgage: A Home Buyer’s Guide to the Right Type of Loan

Julia_Sudnitskaya/iStock

Are you a borrower with a down payment wondering how to shop for a mortgage? We know: Looking for loan products is not exactly what most people would think of as a fun shopping project. Still, your ability to sniff out a great mortgage rate is crucial to your financial well-being as a future homeowner, because the decision you make could stick with you for a very long time, maybe even 30 years. Gulp.

No pressure, right? All we’re trying to say is, it pays to learn how best to compare your mortgage options—which is where this latest installment in our Stress-Free Guide to Getting a Mortgage will come in handy.

How to shop for a mortgage

Like your most trusted shopping buddy, our guide on how to shop for a mortgage lender and a mortgage rate will show you how to hone your bargain-hunting skills and get the most for your money.

Let’s get started mortgage shopping, shall we?

Step 1. Shop for a mortgage that fits your needs

Ideally, you should start shopping for a mortgage three to six months before you plan to buy a home after you have a down payment. This lengthy lead time is important because you may have to invest time in boosting your credit score. You’ll need a credit score on your credit report of 760 or higher to qualify for the best mortgage rates, says Richard Redmond, mortgage broker at All California Mortgage in Larkspur and author of “Mortgages: The Insider’s Guide.” You’ll need a minimum credit scoring of around 660 on your credit report to qualify for any mortgage at all.

If your score isn’t up to par, mortgage lenders can tell you what you need to do to improve it. (They can also help you save for a larger down payment.) This could involve getting an error removed from your credit report and FICO score, which is a real possibility, given that one in four Americans reported spotting errors on their reports in a 2013 Federal Trade Commission survey.

Step 2. Find low mortgage interest rates

As you probably know, one of a borrower’s main goals while shopping around for a mortgage lender is to secure a low fixed interest rate on a home loan. The mortgage rates different lenders charge, after all, are basically a service fee charged by lenders and are not always apples-to-apples. The lower your mortgage rate, the less money you’ll pay back each monthly payment—and every quarter of a percent counts!

On a 30-year $200,000 mortgage with a 4% fixed rate, for instance, you’ll end up paying back not only that $200,000 loan amount in your monthly payment, but an extra $143,739 in interest over the life of the loan, by the time those 30 years are up. That massive mountain of money on your home loan will end up higher or lower depending on the mortgage interest rate you get. Shorter-term loans for 15 years mean you’ll pay less in interest. You may also be able to refinance your mortgage down the road with your mortgage company.

You can compare fixed rate interest mortgage rates at realtor.com/mortgage/rates, but keep in mind the rates listed here may not necessarily apply to you. What rates you qualify for depend on several factors from your debt-to income ratio to your credit score. Better (meaning higher) credit scores merit better (meaning lower) interest rates.

But there are exceptions. Some first-time buyers may have access to lower interest mortgage rates through the Federal Housing Administration. Mortgages through lenders like the government-backed U.S. Department of Veterans Affairs, which are available to active or retired military personnel, enable borrowers to buy homes with lower interest rates than conventional loans as well. Buyers can also check out Freddie Mac, a government-owned company that funds banks so it can make new mortgage loans to homebuyers. The Federal Housing Authority (FHA) also approves and insures FHA loans with mortgage lenders.

Step 3. Analyze your closing costs

A low mortgage interest rate and a nice down payment may win you bragging rights as a borrower, but this is hardly your only goal. That’s because mortgage quotes come with sizable closing costs, totaling an additional 2% to 7% of the sales price of your home. Some of these extra lender fees are nonnegotiable, such as state transfer taxes, but some fees are negotiable, says Katie Miller, vice president of mortgage lending at Navy Federal Credit Union.

As such, aim to meet with three mortgage lenders—which could be banks, credit unions, mortgage brokers, or any combination thereof—and get what’s called a good-faith estimate, which breaks down the mortgage’s terms, including the interest rate and fees. Your real estate agent can typically recommend different mortgage lenders.

Also find out from each home loan officer or mortgage broker what lender fees are government-regulated and what fees the lender prices—then haggle on the latter, says Sylvia Gutierrez, a mortgage loan officer in South Florida and author of “Mortgage Matters: Demystifying the Loan Approval Maze.”

If you don’t have a 20% down payment, you may have to get mortgage insurance, which will add to your monthly costs.

A caveat: When a mortgage lender processes your loan application, it runs a “hard inquiry” on your credit score, which can dock your score by up to 5 points, says Beverly Harzog, a consumer credit expert and author of “The Debt Escape Plan.” Your score will recover over time, but it may take a few months. As a result, you should limit your loan shopping to three lenders.

Step 4. Be mindful of interest rate fluctuations

Once you commit to a particular mortgage lender, the lender will underwrite and process your loan application. Then you’ll receive a pre-approval letter, which is a commitment to lend you the money for the mortgage you need to buy a home. Although getting pre-approved from a lender is typically good for 90 days, a borrower’s pre-qualified interest rate isn’t guaranteed until you sign a purchase agreement with a seller, so you’ll want to keep an eye on changes in the mortgage market. However, you can opt to lock in your mortgage rate for a period of 30, 45, 60, or even 90 days, depending on your lender.

Soon you’ll be a home owner making monthly mortgage payments.

Four-Cheese Scalloped Potatoes

Photograph courtesy Anna Williams

These rich, creamy and cheesy potatoes are a crowd-favorite side dish.

Ingredients

Directions:

  1. Position a rack in the upper third of the oven and preheat to 425 degrees F. Generously brush a large skillet with butter, then rub with the garlic. Combine the mozzarella, asiago and raclette in a bowl.
  2. Heat the skillet over medium-high heat. Add half of the potatoes, spreading them out. Sprinkle with 3/4 teaspoon salt, half of the cut-up butter, half of the shredded cheese blend, and pepper to taste. Arrange the remaining potatoes on top. Sprinkle with 3/4 teaspoon salt, and pepper to taste. Pour the cream over the potatoes, then add the nutmeg and bay leaves; simmer 3 minutes. Dot the potatoes with the remaining cut-up butter.
  3. Generously brush a shallow baking dish with butter; slide the potatoes into the dish; arrange with a fork, if desired. (If your skillet is ovenproof, you can skip this step and bake the potatoes in the skillet.)
  4. Sprinkle the potatoes with the parmesan and the remaining shredded cheese blend. Bake until golden, about 25 minutes. Let rest 5 minutes before serving. Discard the bay leaves.
Recipe courtesy of Food Network

Your Home Tax Deduction Checklist: Did You Get Them All?

iStock

Welcome to your home tax deduction checklist! For homeowners, this kind of guidance is essential in the wake of all the changes ushered in by the new tax plan, the Tax Cuts and Jobs Act, that are still rolling in.

The biggest change for 2020? The standard deduction jumped a couple of hundred dollars for taxpayers—to $12,400 for individuals, $18,650 for heads of household, and $24,800 for married couples filing jointly. And this higher number means you need to dig in to all of your home expenses to see if their total sum tops the standard deduction, depending on your filing status. (If the total doesn’t surpass it, then you’ll just take the standard deduction on your taxes when you file.)

To help, here’s a list of all the tax breaks for homeowners.

Mortgage interest

In the past, you could deduct the interest from up to $1 million in mortgage debt (or $500,000 if you filed singly).

“But for loans taken out from Dec. 15, 2017, onward, only the interest on the first $750,000 of mortgage debt is deductible,” says William L. Hughes, a certified public accountant in Stuart, FL.

Mortgages are structured so that you start off paying more interest than principal. For example, in the first year of a $300,000, 30-year loan at a fixed 4% interest rate, you’d be deducting $10,920. (To find out how much you paid—or will pay—in mortgage interest any year, punch your numbers into our online mortgage calculator.)

Note that taking this deduction under the new tax law does require itemizing deductions, but it may be worth the hassle, especially for new homeowners.

Mortgage points

If you bought a home and paid points, then you can still deduct those from your taxes. They must be “true,” or discount, points, not origination points. After all, points are essentially mortgage interest that you prepay, so it makes sense that they’d be treated like the rest of your mortgage interest. Each point is 1% of the loan amount, so if you paid 2 points on that $300,000 loan, you can deduct $6,000.

Private mortgage insurance

For now at least, Congress has renewed this deduction.

If you can’t make a 20% down payment on your home, most lenders require that you pay private mortgage insurance, or PMI. The upside: It’s tax-deductible as long as your adjusted gross income is less than $100,000. (For each $1,000 you make after that, you can deduct 10% less of your PMI, up to $109,000.) PMI is generally between 0.3% and 1.5% of the loan amount annually, so on a $300,000 loan, you’d be deducting between and $900 and $4,500.

Home equity debt interest

Homeowners often take out a home equity loan or home equity line of credit in order to tap into some quick cash—for college, weddings, home improvements, or otherwise—using their home as collateral. And up until 2017, homeowners could deduct the interest on home equity debts up to $100,000 for married joint filers.

Now? “Home equity debt interest deductions have been eliminated,” says Eric Bronnenkant, a certified public accountant and financial planner, and head of tax at Betterment. That is, unless you spend the money on one thing only: home improvements.

So if you’re eager to renovate that kitchen, this deduction still stands. But if you have to foot the bill for your daughter’s wedding, the IRS will no longer pitch in, explains Amy Jucoski, a certified financial planner and national planning manager at Abbot Downing.

And unlike mortgage interest deductions, the new rules on home equity debt apply to all loans regardless of when they were taken. And to reap the benefit, your total debt—meaning your mortgage plus your home equity loan—can’t be more than the new $750,000 cap.

Property taxes

In the good ol’ days of 2017, your property taxes were fully tax-deductible.

This tax season, there’s a $10,000 cap on the combined amount of your property taxes, state and local income taxes, and (for states without income tax) deductible sales tax.

One bright side for landlords and those with vacation homes: “You can take deductions for all the properties you own, plus add your state income tax,” says Steven Weil, president of RMS Accounting, in Fort Lauderdale, FL.

Energy-efficient upgrades

Did you add solar panels or a solar-powered water heater last year? That means you can help yourself to a tax credit.

According to Bishop L. Toups, a taxation attorney in Venice, FL, qualifying solar electric panels and solar water heaters are good for a credit of 26% of the cost of the equipment and installation. For a $30,000 green investment, that’s a cool $7,800 back!

To qualify, the solar panels have to generate at least half of the energy used by the home, they have to be installed in your primary residence, and they can’t be used to heat a pool or hot tub. (Sorry!)

The credit will drop to 22% until the end of 2021 and then go away.

Home office deduction

The home office tax deduction disappeared for all W-2 employees who have an office elsewhere that they could use if they wanted to. The only people who can continue taking this deduction are those who truly run their own business from home, says Joshua Hanover, a senior manager at Marks Paneth.

Using the simplified home office deduction, self-employed people can take $5 for every square foot of office space, up to a maximum of 300 square feet. For a 200-square-foot home office, you’re looking at a nice $1,000 deduction. Just don’t try any funny stuff—it has to be a dedicated home office, used only for work. Here’s more on the home office tax deduction.

Article by Audrey Ference

7 Mistakes People Make Handling Deceased Family Members’ Estates

Punkbarby/iStock

Dealing with a family member’s death can be a double cruelty. There is the emotional loss. Then, that’s often followed by the monumental task of dealing with the deceased’s estate—you might have to figure out how to sell their home (here’s how to find a real estate agent in your area) and sort through any property or possessions left behind—especially if there’s no will.

Given this is a hard time, it’s understandable that many people in this situation make mistakes. In an effort to get you through this process with minimal pain and suffering, here are the pitfalls to watch out for—and smarter ways to handle them.

1. Going through possessions piece by piece

People tend to start by sorting through each and every item they encounter as they go through the house, says Jacqui Denny, co-founder and chief development officer of estate sale marketplace Everything but the House. But this approach easily becomes a huge drain on time.

“That’s how you end up spending four hours looking through paperwork in one drawer,” Denny points out.

What to do instead: If you want to avoid burnout, she recommends a simple sorting method. Mark four boxes with personal correspondence, photographs, medical papers, and legal documents. Go through the house looking for just those items and place them in their respective bins. Now you’ve removed an entire layer of items from the house, possibly the most important things. You can sort through each box later and decide what to keep or let go.

2. Undervaluing items you aren’t familiar with

Some people will carefully collect the silverware and then drag the fishing equipment to the curb. But some flies are worth tens of thousands of dollars. Who knew? Don’t assume that stuff is worthless because some hobby or style of art just isn’t your thing.

What to do instead: Talk with an appraiser before going through the estate to make sure you aren’t overlooking something rare or valuable.

3. Overvaluing items you like

Denny says she sees this happen a lot: When we like something, we tend to value it more than the market does. For example, a costume jewelry fanatic may think an entire collection is uniformly valuable. But that’s not always so.

“A vintage Miriam Haskell rhinestone brooch can bring hundreds of dollars,” she says. “But the typical, unsigned rhinestone brooch of the same vintage will sell for $35 to $50.”

What to do instead: Manage your expectations! And again, work with an appraiser to find the true value of items.

4. Overlooking the attic and basement

Maybe your parents came from more humble origins and you doubt they’ve collected anything worth a lot of money. You’d be surprised, Denny says. She recalls a client who assumed his mother didn’t have anything worth selling. But it turns out she left behind a 17th-century Korean bodhisattva statue in the attic, which later sold for $47,000.

What to do instead: Don’t neglect the attic and basement. Denny says they’re where the most valuable items are usually found.

5. Letting your vintage-loving friends sort and assess the estate for free

Hey, you have friends who love vintage items and are volunteering to sort through your parents’ estate. That’s better than hiring someone, right? Unless they’re experts, perhaps not.

“What if they donate something you end up seeing on ‘Antiques Roadshow’?” Denny asks.

What to do instead: Thank your friends and let them help you with other tasks. Most estate sale companies will do a free consultation, so you might as well tap their expertise just in case. It pays to have someone knowledgeable about the vetting process.

6. Selling to dealers rather than collectors

Most people consider selling first to dealers, but remember this: A jeweler will pay less for your jewelry than an ordinary consumer who just loves it. A jeweler wants to make a profit; a consumer just wants that lovely piece you have.

What to do instead: If you can, sell to collectors rather than dealers.

“End buyers don’t need to make a profit,” Denny says, “so they are willing to pay more.” The same goes with coins, stamps, and other collectibles.

7. Not dealing with debts

We’ve gone over the profitable elements of an estate. But remember, an estate includes debts as well.

According to the Federal Trade Commission, in the U.S., family members of the deceased are not responsible for paying the deceased’s debts. (That’s in most cases.) Debts should be paid from the deceased’s estate. If there’s not enough in the estate to cover the debt, the remainder goes unpaid. However, there are some conditions when family members may be responsible: if they co-signed an obligation, are a spouse of the deceased, or are legally responsible for handling the estate and haven’t complied with laws.

What to do instead: Be proactive in following up on any debts the deceased left behind. Make sure obligations are met according to the law. You may need to hire a lawyer. You can also contact your state attorney general’s office if you need help.

Article by Adriana Velez

How to Keep Pests Out of the Kitchen

Coffee beans and ground coffee

No matter how much of a critter lover you may be, pests in your kitchen is never fun. But many consumers are also disinclined to spread poison all over their culinary arena. Below are a handful of natural, poison-free ways to keep those creepy crawlies outside where they belong.

Vinegar and oil. No, you’re not making a salad dressing. By mixing water, vinegar and essential oil in a small spray bottle, you can spray your counter tops, window sills and nooks and crannies to help ban bugs. Use a mix of half white vinegar, half water and 10 drops of lavender oil.

Lemon juice. Like the vinegar mix, lemon juice can act as a natural deterrence. Cut it with water and sprinkle it around your counters, the backs of your shelves and anywhere you see bugs infiltrating.

Diatomaceous earth. This soft rock powder sounds like a mouthful, but really works to help keep critters outside. Simply sprinkle it in the cracks of your home where pests are likely to infiltrate.

Coffee grounds. Yet another wonderful gift from the coffee plant. This trick works outside rather than inside—sprinkle coffee grounds around the foundation of your home to deter bugs from climbing in.

Dish soap. While not completely “natural,” this is likely something you already have hanging around your home. Mix a bit of soap with water and rub it along your baseboards, window sills and door jambs.

7 Colors Paint Pros Secretly Hate: Is One on Your Walls?

Getty Images

You’d think that colorists and paint professionals who spend their days sifting through chips and wheels might have an affinity for every shade under the sun. But you’d be dead wrong! Alas, the general consensus is that a few colors just don’t play nice in any room, in any home, period.

“Not every paint color works where you want it to, especially when it comes to the bold and bright ones that live at the bottom of color cards,” says Dee Schlotter, senior color marketing manager at PPG.

Even some of the more subtle shades—like in the white family—can give the experts pause, particularly in the wrong lighting.

“Proper lighting is important because when it’s off, whites can come across as dingy or gray,” she adds.

So if you’re really in love with that tangerine paint, go for it. It’s your house, after all! But if you’re working with a paint pro at the home store or an interior designer, let the expert lead the way when it comes to certain paint shades—like the following.

1. Light green

Photo by Nunley Custom Homes

“As someone who employs a ton of thoughtful colors into all of my projects, there are very few that I truly dislike, because it’s all about context. But there are a couple that I have a strong aversion to—and one is celery green,” says Liz Caan, a Boston-based interior designer.

The reason? “It lacks visceral warmth and doesn’t sit well in any space,” says Caan. Celery Ice from Benjamin Moore is the worst vegetal version atop Caan’s no-fly list.

2. Garage-floor gray

Photo by Ballistic Concrete Coatings

There’s a reason this bland medium gray should be slapped only onto prison walls and your outdoor shed.

“It’s feels so cold and institutional,” laments Caan.

Word to the wise: Skip Anonymous by Behr and anything that comes close, and your rooms will thank you.

3. Bright orange

Photo by Greenauer Design Group

You want to live on the edge, so you grab orange paint. But don’t pick this hue if you’re hoping for quiet ambiance.

“The PPG color Orange Poppy isn’t the best option in a bedroom or space where you’re looking for a sense of tranquility,” says Schlotter. Save this shade for an accent wall or kid’s playroom, where it’ll evoke a sense of energy.

4. Off-white

Photo by RLH Studio

It’s a classic that’s been covering walls forever—but some decor pros believe it’s time to put it out to pasture. Yup, we’re looking at you, Navajo White.

“It’s a warm off-white that’s been around for decades, but the variety of neutrals has expanded so much in recent years and now includes soft pinks, sage-greens, and gray-blues, so it would be great to push the palette a bit for those still stuck on Navajo White,” says Sara McLean, color expert and stylist at Dunn-Edwards Paints.

For folks who can’t leave off-white in the dustbin, McLean suggests newer options like Pueblo White or Gunnysack.

5. Vivid yellow

Photo by Michelle Hinckley

Small doses, please, urge the pros when it comes to acidic shades like this type of yellow.

“PPG Crushed Pineapple is best on an interior door or a picture frame, as this vivid shade can expand when it hits the wall and then easily overpower a space,” offers Schlotter. But yellow just might be your jam—and if this is the case, opt for a softer, lighter version at the top of the color card.

“You’ll often achieve the look you’re going for,” she adds.

6. Flesh tones

Photo by Lake Country Builders

Debra Kling, a color consultant, wishes the whole spectrum of “CoverGirl” colors would disappear.

“These midsaturation pinky beiges and flesh-tone shades belong in liquid makeup bottles, not on your walls,” she points out. The varying amounts of brown, pink, and yellow that they contain make for muddy, unattractive paint. There, we said it.

7. Neon anything

Photo by Canon & Dean

Your teen may think she’s dying for a hot pink and lime-green room, but it’s a headache in the making.

“Neon colors are just too electric for any interior design use—because no one needs fire-engine red or yellows that are more blinding than the sun,” says Kling.

In fact, neons tend to confuse consumers who are looking for a bright pop of color, say, on a bold front door.

“Other sufficiently intense colors pale by comparison, and I think neons should be eliminated from paint company fan decks altogether,” she adds.

Greek Chicken Meatballs

Simply Recipes
With spring firmly on the horizon, we’re looking for fresh dinner ideas, and at the top of the list are these flavor-packed meatballs, perfect for your next weeknight feast!

Typically the major roadblock in making meatballs for a quick dinner is the belief that they should be cooked in a slow simmering sauce. But meatballs need not be relegated to a slow Sunday afternoon. In fact, great meatballs can be both insanely delicious, adventurous and infinitely doable in under 30 minutes.

Ingredients

Meatballs

  • Vegetable oil or spray (for the baking sheet)
  • 1/2 cup panko
  • 1 large egg, lightly beaten
  • 1 tablespoon coarsely grated onion
  • 1 cup packed coarsely grated zucchini (6 to 7 ounces)
  • 2 tablespoons olive oil, plus more for garnish
  • 1 tablespoon chopped fresh oregano, plus more for garnish
  • 2 tablespoons chopped parsley, plus more for garnish
  • 2 tablespoons chopped fresh mint, plus more for garnish
  • 1 teaspoon salt, plus more for sprinkling
  • 1/4 teaspoon red pepper flakes
  • 1 teaspoon grated lemon zest
  • 1 pound PERDUE® HARVESTLAND® Ground Chicken
  • 4 ounces feta, cut into small cubes or coarsely crumbled
  • Freshly ground black pepper (for serving)

 

Yogurt Sauce (Optional)

  • 1 cup plain yogurt
  • 2 tablespoons lemon juice
  • 1/2 teaspoon salt
  • 1/2 cup finely diced Persian or English cucumber
  • 2 tablespoons finely chopped fresh mint
This recipe is written in partnership with PERDUE® HARVESTLAND® Chicken

Did you skip mortgage payments last year? Here’s what that means for your taxes

Homeowners who requested forbearance on their mortgages last year could face tax implications this year. GETTY IMAGES

Millions of Americans received forbearance on their mortgages over the past year, and that could have tax implications

Amid the economic turmoil caused by the coronavirus pandemic, millions of Americans opted to pause their monthly mortgage payments. That choice could have implications for their taxes this year — and in years to come.

In March, as COVID-19 began to wreak havoc on the job market and caused millions of Americans to lose their jobs as businesses shuttered, federal lawmakers and regulators took the extraordinary step of extending forbearance to mortgage borrowers. Being in forbearance allowed homeowners to pause making their monthly mortgage payments — originally, borrowers could request up to 12 months of forbearance, though that was recently extended to 15 months.

The measure was taken to prevent homeowners from going into default and foreclosure. So far the effort has been successful. In June, the number of borrowers in forbearance reached its peak, at more than 4 million. Nowadays, 2.7 million borrowers are still in forbearance, according to data from the Mortgage Bankers Association.

Whether you’re still in forbearance now or resumed making monthly payments at some point in the past year, there could be implications for your taxes, especially if you plan to claim the mortgage interest deduction.

How forbearance affects your ability to deduct interest

Forbearance is not a new concept — the strategy is commonly used in the wake of a natural disaster to help affected homeowners get back on their feet financially. But usually forbearance requests are fairly isolated incidents, unlike what’s occurred this year.

“There’s not a lot of information out there that addresses interest during forbearance and how to treat it for tax purposes,” said Paul Axberg, a certified public accountant and president of Axberg Wealth Management, a financial planning firm based in Phoenix, Ariz. (The Internal Revenue Service did not immediately respond to a request for comment.)

Individuals typically use what’s called a cash-basis method of accounting, said Ryan Losi, a certified public account and executive vice president of Piascik, an accounting firm based in Virginia. That means you report income if you receive income. (Whereas businesses report income when they’ve earned it for doing a service, even if they have yet to receive payment.)

“The same goes on the flip side with a deduction,” Losi said. In other words, you can only deduct mortgage interest if you paid interest.

What borrowers in this position need to look out for is their Form 1098. This is the mortgage interest statement provided to borrowers by their lenders or servicers for tax purposes. The document will list how much they paid in interest for the previous year, which they can use to calculate whether they should take the deduction.

In many cases, borrowers entered into forbearance as a precautionary measure but continued making monthly payments. These individuals should pay especially close attention to their Form 1098 to ensure the amount listed is accurate. If it’s not, though, don’t just go ahead and report to the IRS what you think the number should be.

“If you put on your tax return a higher mortgage interest deduction than what’s on the 1098, that could easily them to get an automated letter from the IRS saying the numbers don’t match,” Axberg said.

Tax experts advised contacting one’s lender or mortgage servicer if the information on the Form 1098 appears to be incorrect for any reason.

Ultimately, borrowers who requested forbearance will likely have paid less on mortgage interest last year. That could make the mortgage interest deduction pointless for many people, if it wasn’t already. “With the increased standard deduction due to tax reform, this may not affect you because you weren’t going to itemize anyway,” said Tim Todd, an accountant and a member of the American Institute of CPAs Financial Literacy Commission.

Future considerations

With millions of Americans still in forbearance and not yet making payments, they should pay close attention to what happens when they exit forbearance. They will generally have a range of options to repay the debt they owe: as a lump sum, on a payment plan or at the end of their loan’s payment period.

Borrowers in severe distress may be able to modify their loans, to adjust the interest rate or other factors to make monthly payments less onerous. Some borrowers might even find themselves in a situation where they have some of their debt forgiven.

“Let’s say you go a year in forbearance, you’re say you can’t pay this back, and you get into some adjustment of the notes, then that’s when you can have cancellation of debt income,” Losi said.

Cancelled debt can be taxable — and when it is, it’s sometimes taxed like ordinary income, Losi said.

The Mortgage Debt Relief Act of 2007 excludes any discharged debt up to $2 million for people’s primary residences. As a result, most homeowners won’t need to worry about taxes on that forgiven debt. If for some reason they do, they will receive a Form 1099-C from the lender displaying the amount of canceled debt, which is then added to the borrower’s gross income when they report their taxes.

And if a homeowner ultimately loses their home to foreclosure or sells the home to the lender down the road, the situation is considered a sale for tax purposes. Capital gains or losses may apply, but borrowers in this scenario need not worry about forgiven debt.

Article by Jacob Passy

How the U.S. Housing Market Was Rocked by COVID-19—and Where We Go From Here

Getty Images

As home buyers already know full well, the residential real estate market has been on a wild tear for the past few years—and the pandemic has pushed things to new, uncharted extremes. Buyers who had been cooped up indoors for months rushed into the market seeking larger homes in suburban and even remote locations. They were spurred on by record-low mortgage interest rates. And what have those masses of would-be buyers found? A fiercely competitive housing market marked by soaring prices and not nearly enough homes to go around.

So now everyone wants to know: What’s going to happen with housing in 2021?

Even as COVID-19 vaccines become more widely available and more homes go up for sale, buyers on a tight budget may not get much of a break this year. Those basement-scraping mortgage rates, which put more expensive properties within reach, are beginning to rise again. And while higher rates are expected to slow the out-of-control, double-digit price growth the nation has experienced over the past year, home prices are predicted to continue rising in most metros—albeit at a slower pace.

“The very nature of the pandemic, through the health implications, social distancing, and need to isolate, has really brought a central focus on the importance of home for most Americans,” says George Ratiu, senior economist at realtor.com®. “In a sense, it has elevated real estate markets as a centerpiece of our lives.”

But this newfound obsession with homes has created severe stress points, Ratiu says. “Even with more sellers coming to market, we are undersupplied on the new homes front significantly.”

Still, there may be hope for some normalization on the horizon. While prices aren’t expected to come tumbling down, experts believe the market will loosen up a bit. As more people are vaccinated and can socialize again, more sellers will feel comfortable listing their homes. And, just maybe, buyers may no longer be pressured to do things that over a year ago would have seemed ludicrous: waiving inspections, agreeing to pay closing costs, and sometimes buying homes across the country via video calls, sight unseen.

Frenzied, take-no-prisoners bidding wars might even quiet down into mere skirmishes.

This could all lead to an increase in home sales. Sales dipped in the early months of the crisis as stay-at-home orders were issued across the nation, but began picking up again in May. From May to July, the number of completed home sales jumped from a little more than 307,000 to nearly 500,000. They dipped in the fall heading into the holidays as buyers paused their searches and whatever inventory was left on the market seemed to shrivel up. As more homes come onto the market, sales will likely rise. But buyers shouldn’t get their hopes up too high.

“The market may provide a few more opportunities toward the end of the year as the vaccine rollout really hits people across the country and the world goes back to normal,” says Ali Wolf, chief economist at building consultancy Zonda. But that doesn’t mean buying a home will be easy. “Scant inventory is definitely here to stay for the spring selling season.”

So let’s take a deeper dive into what led to this unprecedented, fast-moving, thrill-a-minute real estate market—and  how it’s likely to play out this year. Buckle up!

Mortgage rates expected to remain low in 2021

You can’t talk about what’s happening in the housing market without talking about mortgage rates.

In early March 2020, before the rest of the world knew exactly how bad the pandemic would become, the Federal Reserve agreed to cut interest rates in order to stave off an economic disaster. It was the first time the Central Bank had made such a move since the 2008 financial crisis. At the same time, investors became spooked from the uncertainty of a looming global health crisis and, predicting a crash, pulled out of the stock market.

What resulted was the lowest interest rates we’ve ever seen. By July, the 30-year fixed-rate mortgage—the most common for new homebuyers—had fallen below 3% for the first time since the 1970s.

“People started running the numbers of how much it costs to rent versus buying a home,” says Zonda’s Wolf. “Low interest rates made buying a home a really viable option for more people.”

With interest rates so low, savvy buyers moved quickly to lock them in. That increase in demand depleted already slim inventory and pushed up prices to new highs.

Rates have since begun to climb, hitting 3.09% for 30-year fixed-rate mortgages in the week ending on Thursday, according to Freddie Mac. They’re expected to continue rising through 2021, eventually hitting at least 3.4% by end of the year, according to the realtor.com economics team. That could price out some buyers as well as slow the double-digit home price growth that has become a hallmark of the pandemic.

“People are beginning to realize that rates are on their way back up and they’re no longer searching for the bottom,” says mortgage broker Rocke Andrews, of Lending Arizona in Tucson, AZ. “It’s created a rush of activity.”

Fewer homes on the market equal way more competition

Before the coronavirus upended the world, the nation was already suffering from a severe housing shortage.

At the beginning of the year, the number of active listings hovered above 1 million. By April that number began to plunge as buyers scooped up whatever inventory there was. Meanwhile, sellers, especially older ones or those with preexisting conditions, were afraid to put their homes on the market and have strangers in their homes during a global pandemic. Last month the number of homes on the market was nearly halved from where it was a year ago—to fewer than 525,000—the lowest level in years.

“Normally we talk about how many homes are on the market in terms of how many months of supply we have,” Wolf says. “Now we’re talking about weeks in some markets.”

The fear of contracting the coronavirus isn’t the only reason sellers have been hesitant to plant “For Sale” signs in their yards. Sellers, of course, are typically buyers, too—and people don’t want to sell their homes until they have another place to live. In a Catch-22, there isn’t enough inventory now for them to find new homes. So, even if they want to sell in order to take advantage of the overheated housing market, they’re often stuck where they are.

Others have refinanced their mortgages to such low rates that they’re choosing to stay put and remodel their way into their dream residences. And some are waiting for prices to hit a peak before listing so they don’t leave even a cent on the table.

But buyers may get some relief soon, as sellers become more comfortable putting their homes on the market. In fact, the number of new homes coming to market has already started to increase in the past couple of months, but still far below where things were a year ago.

The number of new listings coming onto the market fell to nearly 288,000 in February nationwide—a 24% drop compared with February 2020, before the pandemic became a crisis in America.

One grim note: Once the foreclosure moratorium ends, homeowners who haven’t been able to financially rebound from the crisis may be forced to sell their homes. This could also add to the supply of properties on the market.

“That will help alleviate scarcity concerns,” says lender Andrews.

Homebuilders are struggling to keep up with demand

The lack of existing homes was only part of the problem, though. Builders have struggled to ramp up construction on new homes, particularly the most popular single-family models. A lack of available land and skilled construction labor, soaring lumber and materials costs, and cumbersome laws have stood in the way of more new homes coming online to ease the housing crunch.

What buyers wanted also shifted during the pandemic. It became all about extra square footage for home offices, gyms, and schooling areas for the kids—which were all more readily available outside of the big cities.

“Buyers suddenly wanted [to live in areas with] lower population density, lower costs, and markets with lower restrictions,” says Robert Dietz, chief economist of the National Association of Home Builders. “The markets that grew the fastest were medium-sized suburbs.”

In order to keep up with demand, homebuilders began ramping up new construction starting in April and early May. By January, the number of new home starts rose by more than 76%—from an April low of about 1 million to 1.9 million. (A decline in February was mostly due to unexpected snowstorms in the South last month.)

But even that jump wasn’t enough to sustain demand, and new homes have become about $24,000 more expensive thanks to lumber costs skyrocketing nearly 200% due to Canadian tariffs.

Looking ahead, Dietz says the pace of construction of single-family homes may start to cool off, but construction should still expand in 2021 due to continued demand.

“The acceleration we’ve had is not a sustainable pattern, but it will still continue to grow because we simply do not have enough housing in the United States,” Dietz says.

Home prices will continue rising—just not as fast

It doesn’t take an economist to realize that overwhelming demand (helped by record-low mortgage rates) plus a dearth of homes on the market equals skyrocketing prices. Prices had already been rising over the past few years, but by April, things began moving at an accelerated pace.

From February 2020 to February 2021, the median listing price in the United States jumped from $310,000 to $352,500—an increase of almost 14%! While a boon for sellers, that kind of meteoric rise hurt buyers whose incomes weren’t growing at the same pace. Some perspective: The national median family income rose just 4% from 2019 to 2020, according to the U.S. Department of Housing and Urban Development.

At the same time, buyers from ultraexpensive cities like New York City and San Francisco who could suddenly work from anywhere with a stable internet connection entered less expensive markets. And you guessed it: That pushed up prices in those markets, too. In some cases, way up.

This phenomenon caused some longstanding local residents to be forced out of their markets where they were hoping to move from renters to homeowners, or looking to trade up their homes—or even downsize.

“This shift does pose a risk to someone born and raised in the area, especially if they don’t have the same salary, or the same wealth built up,” Wolf says. “It’s creating its own version of winners and losers, because of how high these relocation buyers can push prices.”

In the end, sellers will continue to have the upper hand in 2021. Home prices are expected to hit newer highs as demand remains strong and inventory continues to be tight. More inventory hitting the market will also take some of the pressure off, but not a lot.

Not this year, anyway.

Article by Elena Cox

12 Vegetables and Flowers You Can Plant Outside Right Now—Even Before the Last Frost

Getty Images

Finally, at last, the Longest Winter Ever will soon be in our rear-view mirror—which means it’s a great time to kick-start your spring garden (or victory garden part deux).

“In most of the country, late March and early April signify the start to the gardening season,” says Amy Enfield, a horticulturalist for Miracle-Gro.

Worried that temperatures may plunge below freezing again and kill your young greenery in a last-gasp frost? It turns out your concerns are unfounded since, Enfield points out, “certain hardy plants and vegetables can withstand chilly nights and late-season frosts.”

In fact, certain vegetables and herbs actually do best when planted in early spring, says Sandra Steineke, director of merchandising at Gurney’s Seed & Nursery. The early planting gives the plants a chance to mature, leading to higher yields and better quality produce.

More good news: Vegetables aren’t the only plants that flourish when planted in March and April. Many flowers also perform best in the cooler weather of early spring, since they tend to wither in the hot, dry temperatures of summer.

So what exactly should you plant right now? Whether you’re planting seeds or established plants, we asked gardening experts to discuss which vegetables and flowers you need to get in the ground now, and some best practices for planting.

Vegetables you can plant in March

Here are the fruits and vegetables you should plant now:

  • Leafy greens like Swiss chard, spinach, kale, collards, and lettuce
  • Cole crops such as broccoli, cauliflower, Brussels sprouts, and cabbage
  • Tuber vegetables, including radishes, beets, turnips, carrots, potatoes, and onions
  • Asparagus
  • Rhubarb
  • Strawberries (Note: Wait to plant them until after the last chance of frost in your region.)
  • Herbs (“There are several cool-weather herbs like parsley, cilantro, and chives,” says Enfield.)

Flowers you can plant in March

Several types of flowers do their best in the cool weather of early spring, Enfield says. They include the following:

  • Pansies
  • Violas
  • Snapdragons
  • Sweet William
  • Sweet alyssum

“Adding them to your garden in March or early April provides an early pop of color, as well as provides beneficial nectar for early-season pollinators,” Enfield says.

Is your soil ready for plants?

No matter what you plant, make sure the soil is ready—and that means unfrozen and dry.

“For instance, planting potatoes, onions, or seeds in cold, wet ground that will not dry out for weeks and weeks will cause these items to rot before they sprout,” explains Steineke.

If you’re eager to plant but your soil isn’t quite dry, plant flowers and vegetables in containers first, and then transfer them into the ground later.

What happens if you have another frost?

A few warm, sunny days might fool you into thinking winter is over. But a frost or two might still be likely in late March.

Many cool season plants can withstand a light frost, Enfield explains.

“Semihardy vegetables like beets, carrots, cauliflower, lettuce, Swiss chard, and potatoes will survive light frosts and temperatures down in the upper 20s or low 30s,” she says. “Hardy vegetables like broccoli, Brussels sprouts, cabbage, radishes, spinach, and turnips will survive harder frosts and temperatures down to the low 20s.”

How to protect your plants from frost

To protect your early spring plantings from a cold night or frost threat, cover the plants in the early evening with an old bedsheet, newspapers, or plant cone. Or you can move plants in containers under a covered porch or into a garage.

Just don’t forget to remove the coverings in the morning, or they won’t get enough sunlight.

How much to water plants

To keep your plants alive and well, water them about an inch a week. Check your plants for water every few days by sticking your finger into the soil near the plant an inch deep. Water the plants if the soil is dry. If it’s still damp, wait a day or two.

“Rain tends to be plentiful in the spring, so you may find you don’t need to water hardly at all,” Enfield says.

Fertilize or feed your plants regularly, too, following the instructions on the fertilizer label for how often and how much your plants need.

“This will instantly feed your vegetables, flowers, and other plants, and give them the nutrients they need to grow bigger and more beautiful,” Enfield says.

Article by Erica Sweeney