May 21, 2007

Home Renovations: Beware of Sneaky Contractors

Home Renovations: Beware of Sneaky Contractors

 

Having a new home built or doing some renovation? Odds are, you're not getting everything you paid for.  With many home construction projects, a contractor or a subcontractor may be cutting corners at your expense.

 

There are honest building professionals, but many will play every angle to increase their profits.  They might use low-end building supplies instead of quality components… instruct workers to use one nail where two would be better… or inflate charges on invoices.

 

Strategy: To get the home materials and workmanship you've actually paid for, include specific details in the contract.  Spell out specific brands, model numbers and dimensions of each component.  (Some large home-building companies include such details in their contracts as a matter of course, but most contractors don't.)

Examples: Instead of "kitchen faucet," write "Kohler Vinnata kitchen sink faucet in brushed nickel, model number K-690-BN." Instead of "14 double-hung windows," you might write "14 Andersen Windows 400-Series Woodwright Double-Hung Windows with oak finish, 3' 1 5/8" x 4' 8 7/8"."

 

Make sure the contractor agrees to these details before he quotes you a price.  Otherwise, he might inflate his quote to account for your "upgrades."

 

Visit the building site (or nose around the project if you're still living in the home) at least every few days during construction to make sure the contract is being followed.  If you spot a potential problem, mention it to the contractor as soon as possible, not after the work is complete.

 

Have you had any work done and think something like this may have happened to you?  Leave us a comment below.

 

 

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May 20, 2007

Home-Equity Borrowing Stalls


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May 19, 2007

Should Newlyweds Buy a House?

Should Newlyweds Buy a House?

If you're like many freshly minted couples, now you're thinking about buying a home of your own, with plenty of storage space for the wedding gifts you actually kept.  But how do you know if you can afford to be homeowners? Is it wise to buy a home before the ink dries on your marriage certificate?

 

Check out this list of  common mistakes newlyweds make when buying a home…

 

 

 


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May 18, 2007

NAR Lowers Sales Predictions

NAR Lowers Sales Predictions

 

The National Association of Realtors has lowered its expectations for the housing market this year to reflect stricter lending standards and the decline in mortgage originations to borrowers with poor credit.

 

The association said it expects existing-home sales of 6.29 million in 2007, lower than sales of 6.48 million in 2006, though it forecast a rebound to 6.49 million in 2008.

 

The association predicts the 30-year fixed-rate mortgage should edge up to 6.5 percent by the fourth quarter.

 

 

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May 17, 2007

Delinquent Borrowers May Get a Tax Surprise

Delinquent Borrowers May Get a Tax Surprise

 

For homeowners seriously delinquent on their mortgages and hoping for some relief, the IRS has bad news: If your lender agrees to modify your loan and forgive any part of your debt, you could owe federal income taxes on the amount forgiven.

 

When personal debts are canceled by a creditor, the amount forgiven is treated as ordinary income under the Internal Revenue Code unless the taxpayer is insolvent or bankrupt. And the lender is required by law to report the amount canceled to the IRS.

 

This is especially bad news for the growing numbers of credit-impaired sub-prime borrowers who find themselves "upside down" in the current market: They owe more on their mortgages than the value of their houses, thanks to noxious combinations of zero down payments, declining property values and hefty payment increases they can't afford.

 

Proposed new, bipartisan legislation on Capitol Hill could soften some of the effects on financially stressed homeowners, however. The Mortgage Cancellation Tax Relief Act of 2007 (HR 1876) would amend the tax code to exempt debt forgiveness on principal home mortgages from being treated as income.  The legislation potentially could assist many other homeowners in financial trouble who negotiate pre-foreclosure "short sales" or deeds in lieu of foreclosure, or whose foreclosure proceeds are insufficient to pay off their mortgage debt.

 

We'd love to hear any comments you'd like to leave on this proposed new legislation.  Just click the Comment link below.

 

 

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