Remodeling? Get the Best Bang for the Buck

Your home is your castle, but sometimes that castle may need a face lift. Remodeling is a great way to create a home environment that can meet your family's changing needs and tastes without you having to spend a lot of money.

Before you spend your hard-earned dollars, however, make sure that the changes you make now will have longer-term benefits for you when you look to sell your home in the future.

You should find out what features are standard for homes in your neighborhood. If you only have one bathroom but most of the other homes average two or more, you will want to bring your house up to that standard. On the flip side, do not make changes to your house that are too extravagant or out-of-place for your neighborhood.

Make sure you are not making changes that will turn off prospective buyers. Keep in mind what future home buyers would like to see in their next home. For example, it may be wise to add an additional bathroom or bedroom rather than a sun room or sauna, which are costly and will not necessarily be a priority for anyone else.

The size and cost of your project matter as well. The Joint Center for Housing Studies at Harvard University advises that smaller or midrange jobs overall will tend to recover a higher percentage of their cost than larger, higher-end projects.

For example, replacing old windows will generate a higher payback ratio than adding a high-end kitchen with all of the bells and whistles and costs significantly less, according to Stephen Melman, an economist with the National Association of Home Builders. (www.nahb.org)

Maintenance-related projects, such as siding and window replacement, are especially popular because they are repairs that are seen as needed, but can also help improve curb appeal at fairly low costs in relation to other projects.

The top ten midrange projects, cited in Remodeling magazine's "Cost vs. Value Report", that provide the highest percentage return are:

1. Deck addition (wood) - 81.8%

2. Siding Replacement (vinyl) - 80.7%

3. Minor Kitchen Remodel - 79.5%

4. Window Replacement (wood) - 77.7%

5. Window Replacement (vinyl) - 77.2%

6. Major Kitchen Remodel - 76%

7. Bathroom Remodel - 74.6%

8. Attic Bedroom - 73.8%

9. Deck Addition (composite) - 73.7%

10. Basement Remodel - 72.9%

These numbers represent the national average and percentages may vary in your area. To get information on projects that are the best investments for where you live, check out Remodeling magazine's "2008-2009 Cost vs. Value Report" at www.costvsvalue.com.

Whether you are looking to sell your house soon, or just want to remodel for yourself, it makes sense to keep an eye on how the changes you make now will reflect on your biggest investment down the road.

If you'd like more information, please give us a call at 210-244-3635 or email us at bridlebit@gmail.com.

What About the "What Ifs"?

Given the ongoing turmoil in the housing and financial markets, many people who want to buy homes are sitting on the fence, either waiting for the market to bottom out or fearing that it never will. So what is the chance that the market will continue to decline, prices will continue to drop and a home purchased today will be worth less a year from now?
Of course, no one can know for sure what will happen a month, six months, or a year from now. Housing is predictably cyclical, but the current housing slump has already lasted longer than previous downturns. Moreover, timing the market is a strategy that rarely works; by the time it's clear that a market has turned around, it's too late to take advantage of the conditions at the bottom.
Fortunately, San Antonio has not been affected like so many other areas that we are hearing about. And we should not be basing our decisions on markets that are suffering a great deal more than we are. According to the 2008 and 2009 Multiple Listing Service (MLS) report by the San Antonio Board of Realtors (SABOR), at the end of November 2008, there were 949 pending sales. A month later, the numbers were up -- with a total of 996 pending sales. In January 2009, the numbers were up again -- 12 percent from the December figures -- with a total of 1,112 pending sales.
For most Americans, homeownership is a primary source of net worth and an important step in accumulating personal wealth assuring financial security. Today, even though property values have declined in some markets, Americans have a total of $8.5 trillion in equity in their homes. Home equity represents the largest share of net worth for most families.
It is time to buy! Get off the fence!

--Fred Elsner, President/CEO Bridle Bit Corporation and president, Greater San Antonio Builders Association.

FAQs on the $8,000 Tax Credit for Homebuyers

For more information on this really wonderful incentive for first time homebuyers, or buyers who haven't owned a residence for three years, follow this link:
http://www.federalhousingtaxcredit.com/2009/faq.php
for comprehensive information, then come see us!

Economic Stimulus Benefits Housing and Mortgage Industries

Just signed and sealed…a $787 Billion Stimulus Plan made up of tax cuts and spending programs aims at reviving the US economy and helping people acquire, and retain, the homes. Although the package was scaled down from nearly $1 Trillion, it still stands as the largest anti-recession effort since World War II.
Home owners and potential homebuyers stand to gain from key provisions in this stimulus plan. Here is what we know as of today...
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Tax Credit for Homebuyers
Go to this website for answers to most of your questions about the tax credit:
http://www.federalhousingtaxcredit.com/
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Homeowner Affordability and Stability Plan
President Obama today unveiled details of a foreclosure prevention plan designed to help 7 to 9 million responsible homeowners afford their mortgage payments. March 4 has been designated as the official roll out date for the program. The plan has three main components:
1. A refinancing program for borrowers who are current on their mortgage payments but who have been unable to refinance because the value of their home has declined.
2. A mortgage modification program for borrowers in default, or at imminent risk of default, that builds on the model established by the FDIC by expanding eligibility and establishing incentives for borrowers, mortgage holders and servicers.
3. Actions to bolster the financial stability and mortgage support capacity of Fannie Mae and Freddie Mac.
Refinancing Program
· Applies to loans owned or guaranteed by Fannie Mae and Freddie Mac.
· Allows borrowers, who because of a decline in their house value, have a mortgage loan-to-value ratio (LTV) of greater than 80 percent, to refinance to a lower interest rate mortgage, even if the new loan would have previously failed to meet Fannie/Freddie requirements.
· Maximum LTV on new mortgage is 105%. Will not help homeowners who are completely underwater on their mortgage (those households will be addressed in the mortgage modification portion of the program).
· Program is expected to create mortgage refinancing opportunities for up to 4-5 million homeowners.
Mortgage Modification Program
· Builds on the loan modification protocol developed by the FDIC, where a loan is modified by reducing the interest rate, increasing the term and/or deferring/reducing principal payments, if such adjustments result in a better net present value for the mortgage investor than disposition through foreclosure.
· Establishes clear and consistent standards and guidelines for identifying borrowers at risk of default and for loan modifications.
· Eligibility is based on high mortgage debt payments compared to income, or borrowers that are underwater. Delinquency is not a requirement for eligibility. Will also serve homeowners who have not missed payments, but who are in danger of doing so. Requires HUD-approved counseling for families with high (55 percent) total debt-to-income ratios.
· Keeps modified payments in place for at least 5 years, after which payments may be gradually increased to the conforming loan rate at time of modification.
· Servicers receive FSP/TARP funds for undertaking modifications, for subsequent modification successes, and are offered, along with mortgage holders, additional financial incentives to modify loans prior to default.
· Provides financial incentives to borrowers who remain current on mortgage payments following loan modification.
· Provides a partial guarantee to mortgage holders (through a $10 billion insurance fund established by Treasury and FDIC) to offset future declines in the value of the home collateral.
· Program is expected to reach up to 3-4 million at-risk homeowners.
· To establish additional motivation for loan modifications, seeks legislation to make changes in personal bankruptcy statue that will allow judges to modify mortgage terms, including reductions (cramdowns) of principal obligations.
Initiatives to Bolster Fannie Mae and Freddie Mac
· Increases Treasury’s Preferred Stock Purchase Agreements to $200 billion for each company, up from the current $100 billion commitment.
· Continued Treasury purchases of Fannie and Freddie MBS and debt.
· Increases Fannie’s and Freddie’s portfolio limits by $50 billion to $900 billion for each company.
· Commits Fannie and Freddie to providing support to state housing finance agencies.
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Additional Housing-Related Provisions
Tax Incentives to Spur Energy Savings and Green Jobs — This provision is designed to help promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.

Landmark Energy Savings — This provision provides $5 Billion for energy efficient improvements for more than one million modest-income homes through weatherization. According to some estimates, this can help modest-income families save an average of $350 a year on heating and air conditioning bills.

Repairing Public Housing and Making Key Energy Efficiency Retrofits To HUD-Assisted Housing — This provision provides a total of $6.3 Billion for increasing energy efficiency in federally supported housing programs.
Specifically, it establishes a new program to upgrade HUD-sponsored low-income housing (for elderly, disabled, and Section 8) to increase energy efficiency, including new insulation, windows, and frames.

Expanding Housing Assistance — This provision increases support for several critical housing programs. It includes $2 Billion for the Neighborhood Stabilization Program to help communities purchase and rehabilitate foreclosed, vacant properties.

This information was provided by Hillary Singer of Excellence Mortgage in San Antonio, 210-930-5714.

Tax Advantages of Home Ownership

Owning your own home can be a very rewarding experience -- especially when tax time rolls around. Three tax items in particular -- the mortgage interest deduction, the property tax deduction and the capital gains exclusion -- can provide significant financial benefits to home owners. And, in 2009, first-time home buyers may receive the benefit of a $15,000 tax credit. Talk with your lender about this exceptional tax incentive.
Mortgage Interest Deduction
The interest you pay as part of your mortgage payment is deductible on your federal tax return.
This deduction applies to first and second mortgages, up to $1 million of mortgage debt. Your lender should provide you with one or more IRS Form 1098s, which tell you the amount you may claim on your tax return. To benefit from this deduction you must itemize your deductions using a Schedule A form.
You may also deduct the interest on money you borrow against your home to finance housing or non housing-related expenses. An example is a home equity loan, which many home owners use to remodel their home, pay off credit card bills, buy a car, finance a vacation or pay for education expenses.
Property Tax Deduction
State and local taxes paid on the assessed value of the home are also deductible on your federal return. Like the mortgage interest deduction, itemizing is necessary if you wish to deduct property tax payments.
Notably, for many home owners the combined deductions for mortgage interest and property taxes exceed the standard deduction -- currently between $5,450 and $10,900, depending on filing status. When this is the case, home owners are able to deduct or "write-off" many other items including charitable contributions, state income or sales taxes, medical and dental expenses tax preparation fees and other miscellaneous allowable deductions, which collectively can reduce your federal and state income tax liabilities dramatically. Research by economists at the National Association of Home Builders (www.nahb.org) indicates that for the typical home owner, these savings can exceed $8,000 in the first year of home ownership.
Capital Gains Exclusion
Perhaps the biggest advantage to owning a home is the ability to avoid paying capital gains when it is sold. Under current law, married home owners filing jointly may exclude up to $500,000 of capital gains and single tax filers may exclude $250,000 from taxation. This exclusion applies only if you have lived in your primary residence for two years or more. But the exemption may be used repeatedly as long as the residence rules are met.
The tax benefits conferred on home owners by the federal government are substantial. Annual benefits, such as the mortgage interest deduction and the property tax deduction, along with the less frequently used benefit of capital gains exclusion, make home ownership more tax advantageous than almost any other investment. Take advantage of it!

Home Maintenance Tips

It’s the weekend and you have a whole list of household chores to do. Oh, we know you’d rather be golfing or playing tennis or watching TV, but keeping your home in good shape is important. Your home may be the biggest investment you will ever make. Taking good care of it with regular maintenance is necessary to maintain its value and ensure it will provide a comfortable, safe shelter for you and your family for a long time.
Here is a home maintenance quiz that will test your maintenance knowledge. While this quiz does not address every home maintenance project, it does provide helpful tips and reminders for chores you may have overlooked. Call us, email us or post your comments here. We'll answer your questions and discuss any concerns you have about maintaining your new home.
1. How often do forced-air furnace filters need to be changed?
At least every three months during the heating season.
2. What part of the faucet usually needs to be replaced when you have a water leak?
The washer.
3. Should you run hot or cold water through your garbage disposal?
Cold water.
4. How often should the moving parts of garage doors be oiled?
Every three months.
5. What tools can you use to unclog your drains?
A plunger and a plumber’s snake.
6. What tool can be used to unclog a toilet?
Coil spring-steel auger.
7. What faucet part needs to be cleaned every three to four months?
Aerator—the screen inside the end of the faucet.
8. What can you use for traction on icy sidewalks, steps and driveways? (not much of an issue in San Antonio!)
Cat litter or sand—never use salt because it damages the pavement.
9. Where should the fire in your fireplace be built?
On the andirons or grate, never on the fireplace floor.
10. What will prevent soot and add color to the fire in your fireplace?
Throw in a handful of salt.
11. Where should your firewood be stored?
Outside, away from your house and not directly on the ground.
12. What helps keep unpainted concrete floors easy to keep clean?
Concrete sealer.
13. What should you use to clean unpainted concrete floors?
A solution of 4 to 6 tablespoons of washing soda in a gallon of hot water. Mix scouring powder to the solution for tough jobs.
14. When can you clean hardwood floors with water?
When the floors have a polyurethane finish.
15. Do hardwood floors need to be waxed?
Hardwood floors that do not have a polyurethane finish probably will need to be waxed periodically. Use liquid or paste “spirit” wax.
16. What is the best polish for vinyl floors?
Water emulsion wax.
17. When is basement condensation at its maximum? (Again - not an issue so much here.)
In new homes because gallons of water went into the concrete of basement walls.
18. Why should noisy water pipes be fixed promptly?
The condition that causes noisy pipes may be accompanied by vibration that can cause fittings to loosen and leak.
19. Why should frozen pipes be thawed slowly?
Frozen pipes should be thawed slowly to prevent the formation of steam, which could cause the pipe to burst.
20. How often should your roof be inspected?
A qualified roofer should inspect your roof every three years.
21. What should be regularly checked on your security system?
The alarms and circuit breakers should be checked to make sure they are in working order and the sensors should be inspected one by one.
22. To ensure your safety, what household equipment uses batteries that must be checked regularly to make sure they are operable?
Smoke and carbon monoxide detectors.
23. What do you use to fill nail holes and cracks in plaster walls and gypsum wallboard?
Spackling.
24. What is the white powdery substance that develops on masonry walls?
Efflorescence sometimes appears on masonry walls. It is crystallized soluble salts that can be removed by scrubbing with water and a stiff brush.
25. At what temperature should your water heater be set?
120 degrees Fahrenheit
26. How often do skylights need to be inspected?
Skylights should be inspected each time your roof is inspected so leaks don’t develop from cracks and interruptions around its seals, caulking and flashings.
27. What is a simple solution you can use to wash extremely dirty exterior windows?
A solution of equal parts vinegar and water or 3 tablespoons of denatured alcohol per quart of warm water. Use a piece of crumpled newspaper to wash the glass to avoid lint left behind by papertowls.
28. What can you use to help a window slide easily?
Rub the channel with a piece of paraffin.
29. What should you look for when you inspect your siding yearly?
Determine if wood-sided homes need to be repainted; check to see if the caulking around the windows and doors has split and cracked, and replace the caulk; clean the mildew; trim shrubbery away so it does not touch the siding.
And here's a link to the National Association of Home Builders email newsletter for potential and current homeowners. It's free -
www.magnetmail.net/actions/subscription_form_nahb_cenew.cfm

Housing Stimulus to Turn Around American Economy

The national statistics are startling: more than half a million jobs were lost in November, with nearly 1.9 million jobs lost year-to-date. One of the hardest-hit segments is the housing industry and related businesses, where it is estimated that three million Americans have lost their jobs in the past few years.

Although San Antonio has not been hit as hard, we are still suffering consequences of the perception that we are in as dire straights as others around the country. An economic stimulus package currently being proposed to Congress could help reverse this trend and restore our country to financial stability. The centerpiece of the package focuses on the housing market, which accounts for 15 cents of every dollar spent in our country during a typical year.

"It cannot be stressed enough that Congress nneeds to act quickly to stem the tide of the housing crisis across American," said Becky Oliver, Executive Vice President of the Greater San Antonio Builders Association. "When the housing market is suffering, billions of dollars in wages and purchases are lost, negatively affecting almost every sector of the U.S. economy."

Fix Housing First, a coalition of more than 600 organizations led by the National Association of Home Builders, is urging Congress to take quick and decisive action to stimulate the housing market and stop the decline in home values, which will ultimately create more jobs and help lift the American economy.

According to the coalition, this can be done through a significant tax credit and implementation of an interest rate buydown for 30-year fixed-rate mortgages.

The Tax Credit

In July, President Bush signed into law the Housing and Economic Recovery Act of 2008 which authorized a $7,500 tax credit for qualified first-time home buyers purchasing homes on or after April 9, 2008 and before July 1, 2009. However, due to a wave of financial disruptions during September and October, the economy worsened, credit tightened, and the spillover to the general economy was deeper than previously anticipated. This means that a more roust economic stimulus package is necessary to get the economy moving again.

Specifically, a more significant credit is needed to enable families to buy homes and help straighten the economy of their local community and the nation. In the plan that the coalition is recommending, the credit amount would be substantially increased to 10 percent of the price of the home, up to $22,000. Unlike the current credit, it would not be limited to first-time buyers and the home owner would not be required to repay the credit.

The Mortgage Interest Buydown

The coalition is also recommending a mortgage interest rate buydown which will help get buyers back into the market and further stimulate the economy. Interest rates recommended by the coalition range from 3.99 to 2.99 percent for homes purchased by the end of December 2009.

The coalition also supports continued intensive efforts to prevent foreclosures and keep people in their homes.

The combination of these stimulus actions would increase demand for housing, help stabilize home values, reduce foreclosures, restore and save tens of thousands of jobs and turn the housing market and economy back in the right direction.

Fore more information about Fix Housing First, visit http://www.fixhousingfirst.com/



This article by Bridle Bit Corp. president and CEO Fred Elsner appeared in the San Antonio Express-News on Sunday, January 11, 2009, courtesy of the San Antonio Builders Association.