The Ultimate Snow Necessities to Get You Through the Winter

by Lydia Koehn on January 12, 2017 in Home Improvement

The right gear can go a long way toward protecting your household from the hazards of snow and ice. Don’t be fooled by the simplicity of some of these tools. They could be just what you need!

Roof Rake

According to the Occupational Safety and Health Administration (OSHA), at this time of year, most worker injuries and deaths are the result of falling during rooftop snow removal. OSHA recommends removing snow without going onto the roof. Why even worry about rooftop snow? While snowy shingles look lovely, heavy snow and ice can cause real damage to your roof. This is where the roof rake comes in – a snow removal solution that keeps your feet safely on the ground. The top roof rakes are metal marvels, lightweight yet sturdy, and some can even extend up to 25 feet. If you decide to rake your roof, you can keep your rooftop glistening by leaving up to an inch of snow in order to protect the shingles from scraping damage.

If your roof is already frozen with ice dams, try the pantyhose method of allowing water to flow through your gutters and off your roof. A pantyhose leg filled with calcium chloride ice melter and laid perpendicular to the ice dams on your roof will effectively create a path to drain excess water.

The Shovel

Don’t let the multitude of snow shovel models overwhelm you. Before you run out and grab the first red-handled shovel you see, decide on your preferred method of snow removal. The top shovel models differ, depending on whether you’re pitching or pushing the snow. Handle length is another option to consider. Short shovels with extendable handles are perfect for storing in your trunk in case your car gets stuck. Another option is to add on an extra handle to transfer the shovel’s load from your lower back to your upper body, saving you from unnecessary strain.

Snow Spear

No matter how special it may be, sometimes a shovel just won’t cut it – the ice, that is. Stick one to Jack Frost with the True American ice spear. The 7-inch-by-9-inch blade breaks up ice in your driveway, making it easier for you to clear away the snow. Prevent slips and falls while shoveling by first taking a crack at the ice beneath with this powerful scraper.




Boot Tray

Although snowflakes lay nicely on the frozen ground outdoors, once inside, they can wreak havoc on your home’s carpet and hardwood flooring. Stop snow in its tracks with a boot tray beside your front door. Whatever the weather – rain, sleet or snow – these boot trays will help keep your home clean and dry this winter.

Snow Blower

Spare your back and spoil yourself this winter by investing in a quality snow blower. There are two paths you could plow when buying this machine: electric or gas-powered. Of course, there are benefits and drawbacks to both types, and your choice will reflect your priorities. Electric snow blowers are typically lighter and quieter than gas-powered ones, but they do tend to overheat quickly. While there may be nothing quite like the drone of a gas snow blower to break the silence of freshly fallen flurries, gas snow blowers are generally more reliable and better able to handle large amounts of snow than electric versions. If you’re unable to purchase a cordless electric blower, then consider purchasing an outdoor extension cord that won’t freeze, maintaining flexibility in subzero temperatures.

‘Beet’ Snow and Ice

Although you may be used to throwing salt on your steps, large amounts of rock salt can actually be ineffective in extremely cold conditions as well as detrimental to the environment. Because of these and other drawbacks to using rock salt, we recommend trying out an alternative method of combatting ice in front of your home. The Missouri Department of Transportation (MoDOT) uses a mixture of beet juice and salt brine to fight icy roads. When used with beet juice, the salt’s damage to the pavement is lessened, says MoDOT.

Skip the salt altogether and melt the snow instead with electric heating mats and cable systems. From your sidewalk to your stairs (and even your roof!), electric mats and cables keep your pathways clear while you stay toasty warm indoors.

Windshield De-Icer

Don’t drive blind. Clear the view behind the wheel with a windshield de-icer. Effective windshield de-icers melt the ice and snow on your car, making scraping an faster and easier process. Tired of jiggling your icy door handle? Some de-icers even thaw frozen keyholes, doors and windows.

Ice Scraper

Stop struggling and invest in one of these top performing scraping blades to keep the road visible on your commute. The best ice scrapers have sharp sturdy blades, prominent ice-cutting teeth and a standard extension length of 5 feet, suggests TheWireCutter.com. Many ice scrapers also have the dual role of scraper and snow broom, with bristles at the other end of the blade. Additionally, collapsible shafts make for easy storage.


If your community transforms into a frosted wonderland in the wintertime, stock up on these snow necessities to ensure that your home is ready for a winter emergency.

Condos: Pros and Cons for First Time Buyers

by Lydia Koehn on January 4, 2017 from Home Buying/Selling

An empty nest and other lifestyle changes are propelling many people over a certain age to consider condominiums as an alternative to owning a single-family home. Furnishing and maintenance are hassles that are also driving many younger people to opt for condos. We’ve reviewed the potential benefits and drawbacks of condo living to help you decide if buying a condo is right for you, regardless of your age or where you are in life.

The Pros

Maintenance Managed

Owning a house comes with a host of responsibilities that can make condos an easier transition for people first dipping their toes into the housing market. “If you are not handy and don’t like managing people to get things done, a home can be a challenge,” says Sep Niakan, Miami real estate broker and founder of CondoBlackBook.com. Mowing the lawn, cleaning out the gutters and shoveling snow are chores that many people would much rather pay someone else to do. An aversion to home maintenance has driven many people to invest in condos in place of single-family homes. “The reason why millennials like condos versus buying a single-family residence or buying in a neighborhood is the maintenance,” says Charles Kniffen, director of mortgage operations at Quicken Loans. “The maintenance is just a ton less,” he says.

People looking to make the most of retirement are also often drawn to the maintenance-free living that a condo offers. “They are looking to do more outside their homes, to enjoy downtown and waterfront activities. They don’t want to be gardening and working on the lawns on the weekend,” says Alexei Barrionuevo of Curbed.com.

Pack Up and Go

For young people on the move, condos are an excellent home option. “Millennials may lean toward a condo because they might travel for work or leisure a lot, and being able to lock up your unit door and know everything else is being taken care of and secure is a comfort to them,” suggests Niakan. Having the exterior of your home managed by the condo staff cuts residents’ ties with a regular maintenance schedule, allowing them to come and go more freely without worrying about the security and upkeep of their home.

For those approaching retirement, condos allow for increased flexibility in scheduling family vacations and other leisure time. “For those snow-birds that live in the east in the summer and the south in the winter, condo living is perfect,” said Denise Supplee, co-founder and director of operations at SparkRental.com.

Small Scale Luxury

According to Gail MarksJarvis of The Chicago Tribune, people who have retired or are nearing retirement are often attracted to the luxury condo market. As they tour new condos purchased by their children, they are sold themselves on the open layouts, elevated views and vibrancy of many condo communities. “One floor living can be appealing, organized events, and again, perks like a fitness center or swimming can be advantageous to the older home buyer,” Supplee says.

Access to Transit

Another factor motivating people, particularly young people, to move into condos is easy access to public transit. Whether they’re concerned with saving money or with decreasing their carbon footprint, many people closely consider transit access when deciding on the location of condos in both urban and suburban areas, suggests Mark Savel, a sales representative with Sage Real Estate in Toronto.

Lower Price Tag and Insurance

“Because of the lower price tag, it may be easier to qualify for a condominium,” Supplee says. This is a great benefit for anyone who might have a tighter budget to work with. Additionally, insurance rates are lower for condos, as residents are only responsible for insuring the inside of their homes. The outside of condos, including roofing, driveways and common buildings, are all insured through the condominium, and maintenance and repairs are covered through the homeowners association fees.

Move-In Ready

Fully furnished condominiums appeal to many people who may be making the transition to living in a smaller space. For those with busy schedules, move-in ready condos eliminate the often time-consuming search for furniture. And for those looking to avoid the hassle of moving bulky couches and tables, furnished condos could also be appealing.

Close-Knit Community

“In many condo complexes, there’s a certain community that builds up. It might be people under 30 or younger families with kids,” Kniffen says. “There are also senior living communities. You can kind of find your fit,” he adds. You can typically guess at the makeup of the community based on the layout of the housing. For example, four-bedroom houses generally attract families. Thus, those living in condo communities are frequently connected by similarities in age and lifestyle.

Wheelchair Accessible

Condominium projects are also built to appropriate code as specified in the Americans with Disabilities Act to accommodate those with disabilities. “Sometimes you buy a house and maybe you have a friend that’s in a wheelchair, that person may not have access to your house,” Kniffen says. “You know when you buy a condo, they’re going to have access to it because it is built to code and those codes are kept up.”

The Cons 

HOA Regulations

Unlike people who are buying for the first time, people making the transition from owning a single-family home have to adjust to abiding by the homeowners association (HOA) regulations. The loss in autonomy that comes from condo living could be a potential roadblock for those accustomed to the freedom of managing their own house on their own terms.

“You may not like some of the stuff the condo association tells you to do. They may decide that they want all fuchsia doors and that’s what’s going to happen because it’s a condo,” says Kniffen. “They can dictate that kind of stuff.” In addition, the interior of the condo could be subject to certain standards because condo owners desire similar layouts. The potential design limitations of condos could put a damper on your ability to express your individual style.

HOA Fees

Although you’ll be paying less insurance with a condo, there are the HOA fees to consider. HOA fees are monthly dues that usually cover maintenance, lawn care, and other services and repairs. Covered services vary, so make sure you know what’s included in your condo’s HOA costs. Fees can range from a couple hundred dollars up to a thousand dollars a month and can be raised at regular intervals.

Make sure the condo’s HOA budget is in order. If it isn’t, the association dues might not cover emergency maintenance, and you could be stuck with a higher bill down the line. Quicken Loans requires that 10% of the HOA budget go toward emergency savings when you’re applying for a mortgage on a condo.

Hard Sell


Condos can be more difficult to sell as a result of certain HOA regulations. “If your association’s not doing the right thing, then you could be very limited on who you can sell your property to or who will buy your property. It can affect the type of loans that you qualify for along with your potential buyer,” Kniffen says. Also, high HOA fees could be a potential deterrent to future buyers, making your condo more difficult to sell.

Tips for Lighting up the Holidays

by Maegan Wyrzykowski on November 17, 2016 Home Decorating

Before Thomas Edison invented the lightbulb, candles were used to light up trees during the holiday season. Can you imagine having candles burning on a tree inside your house? As I’m betting you can imagine, this led to many house fires. Thanks to Edison and his friend Edward Johnson, the first-ever string of electric lights was put together in 1882.

Holiday lights aren’t just used for trees anymore; they’re used in many different ways. From decorating stairs to lighting up the outside of your house, string lights have become a necessity when the holiday season rolls around. If you’re anything like me, you’re busting out the lights and decorations on November 1 every year.

Here are some safety tips, tools and trends for lights during the 2016 holiday season.

Safety Tips from Mr. Electric

• Read labels. When hanging lights outside, read the back of the packaging to make sure they’re safe for the outdoors.
• Don’t use metal. When hanging lights outside, using a plastic or wooden ladder helps prevent electrical shocks.
• Don’t overload extension cords. Having more than three strings of lights on one extension cord can cause overheating and could potentially start a fire.
• Don’t leave lights on. Always remember to turn your holiday lights off whenever you’re leaving the house or going to bed. If you’re forgetful like me, opt for an electric timer and program it to turn your lights on and off at specific times.
• Examine all wires. Whether they’re new or old, always examine your wires before plugging them in since frayed wires are a fire and shock hazard.
• Buy new lights regularly. Older lights are a fire hazard. Buying new lights every year may be expensive, so wait until the end of the season when lights are on sale and save them for the following holiday season.

Holiday Light Tools

• Command Brand hooks and clips are something to consider if you don’t use them
  
  already. They’re a great way to hang up lights indoors and outdoors, with no damage to your house. Command Outdoor Light Clips stick to siding, windows or gutters, and they are specifically designed for outdoor use, so you don’t have to worry about your decorations falling down.
• Twist and Seal products are a great solution for protecting plugs outside from shocks and shortages. They’re weather resistant and come in green so that they can be easily hidden by trees and bushes. Twist and Seal also has a new cord protector made for protecting extension cords.
• There’s nothing worse than untangling your lights, only to find out that a bulb is dead. The LightKeeper Pro is a great tool for this situation. This device sends a pulse through the entire string of lights, finds the dead bulb and fixes the shunt.

2016 Trends

• According to the DIY Network, LED lights are better than incandescent. They might cost more than incandescent lights, but they last longer. They can also save you around 80% on energy costs.
• The debate over colorful lights versus white lights is still ongoing. Personally, I love when I drive past houses with strings of colorful bulbs wrapped around the façade and in the bushes because it reminds me of a gingerbread house. Both types of lights have their proponents, so use whichever suits your fancy.
• I’m sure you’ve seen the videos of houses with Christmas lights that turn on and off to the beat of songs. This has become increasingly popular over the years. With the help of GE holiday lighting products, you, too, can have a spectacular show on your front lawn! GE Color Effects products come with a remote control, allowing you to choose from six colors and 40 functions.

FHA Loan? Refi and Keep Your Low Mortgage Insurance Rate

No one likes paying for mortgage insurance. To that end, I’ve got some good news!

If you have an FHA loan endorsed prior to June 1, 2009, you have the opportunity to do a rate and term refinance while keeping the same low mortgage insurance rate you currently have.

This is a huge savings opportunity for homeowners with FHA loans. With an FHA loan, there are two different rates you should look at when determining whether refinancing makes sense: the interest rate and the mortgage insurance rate. Mortgage insurance rates have been pushed higher since June 2009, but homeowners with these loans who are looking to refinance have been given a reprieve from the higher rates. Now that you know your mortgage insurance rate won’t change, why would you refinance? Let’s talk about interest rates for a minute.

Interest Rates Are Great

Simply put, interest rates have rarely been better. Now is a great time to refinance to either lower your payment or pay off your mortgage sooner.

When you close, you can choose to pay for prepaid interest points in order to get a lower interest rate. One point is equal to 1% of the loan amount. For context, let’s take a look at where rates were in the final days of May 2009. If you paid for half a point at that time, your rate would have been in the mid-5% range.

Now fast forward to today. For a 0.375 point investment, rates are around 3.4% for a 30-year fixed-rate mortgage. Imagine how much you could save on interest by refinancing with a lower rate. They’re even lower if you choose to go to a 15-year term. Those rates are in the high 2% range.

There’s even the possibility that you can accomplish the same benefits – such as a lower rate or shorter term – with an FHA Streamline refinance. This doesn’t require an appraisal, and less income and asset documentation may be required.

So what are you waiting for? If you have an old FHA loan, go ahead and refinance now to save yourself some money.

Can Money Management Programs Help You? Yes, if You Follow Their Advice

by Dan Rafter of Saving Money

It’s a common problem: You vow to spend less each month than what you earn. Or maybe you plan to stash at least $300 at the end of the month in a savings account that you can tap for unexpected financial emergencies.

But then the end of the month hits, and you’ve spent $300 more in groceries, $50 more in entertainment and $40 more in gas than you’d planned. You no longer have any money for savings. In fact, you don’t even have enough to pay off your credit card balance in full.

The truth is, creating a budget and then actually sticking to it isn’t easy. We can all use help at times.

Fortunately, such help exists in the form of money management software. This software, such as Mint.com, YNAB and LearnVest, helps consumers create budgets, track their spending and set financial goals. Some programs even send consumers alerts when they're in danger of spending too much on clothes shopping, dining out or gas for the month.

Consumers and financial advisors alike say that these money management tools can help users not only set realistic financial goals but also stick with them.

Magda Walczak, chief customer officer for Chicago-based software company Search Party, said she began using Mint.com, one of the most popular of the online money management programs, about eight years ago when her credit card information was stolen during a trip to Africa. Walczak didn't find out about the theft until 10 days later, when her statement came and it listed several purchases that she hadn't made.

"No one called or e-mailed me before that, so I decided that I needed something that would help me understand where I stood financially on a more real-time basis," Walczak said. "Ever since then, every account I have is hooked up to Mint."

Walczak today has several alerts set up with Mint. The program will send her a message when she's close to breaking her monthly budget, for instance, on clothes shopping.

"You set your goals on what you are saving for," Walczak said. "The program helps guide you. It pushes you on the right path to those good habits. After that, it's up to you."

Financial advisors agree that budgeting and money management software can provide a boost to consumers hoping to get their spending under control and increase the money they save each month.

But for this software to do its job, users have to actually adjust their monthly spending. No software can force consumers to do this.

"I don't think there's a better tool out there right now," said DeDe Jones, managing director and registered investment advisor with Lakewood, Colorado-based Innovative Financial. "But like any tool, you can use a hammer wrong, too, and have bad results. If you ignore what the software is telling you, you won't get the results you want. But if you use these tools properly, it can make a significant impact."

There are plenty of programs that can he popular programs to help you decide. But remember what financial pros say: The program you choose is not as important as whether you actually pay attention to what these services are telling you about your finances each month.


“I work with many types of clients, some who use automated money management tools, some who have their own spreadsheets and others who use nothing,” said Diane Nissen, founder and owner of the Alexandrite Group in Rochelle Park, New Jersey. “In all cases, the use of something to keep track of their spending is vital to understanding what they need to change.”

Mint.com: This Web-based tool is free and easy to use. Just sign up, and you can quickly connect your important accounts – your savings account, checking account, mortgage loan, auto loan or whatever you want – to your new Mint.com account. Once you do this, your financial information is updated automatically every time you make a payment, deposit money or make a withdrawal.

Mint shines when it comes to budgeting. The program allows you to create your own financial goals. Mint will then track how well you’re moving toward them. Say you want to limit your spending on dining out to just $100 a month. If you get too close to this limit, Mint will send you a warning.

It’s easy, too, to create a budget with as many categories as you want. Mint will track how much money you’ve spent in each category so that you can easily see how well you’re meeting your budgetary goals for the month.

LearnVest: The online money management program LearnVest isn’t as well-known as Mint, but it’s still plenty useful. It even offers a few options that its more popular competitor doesn’t, though they’ll cost you.

The basic version of LearnVest is free. And like Mint, you can use the program to track your monthly expenses and income. Unlike Mint, though, LearnVest aims to be more of an educational tool. All the budgeting and tracking features that it offers come with financial strategies and information designed to boost the financial literacy of its users.

You can even sign up to work with a financial advisor through LearnVest. This service, though, isn’t free. You’ll have to pay a $299 charge to first connect with a financial advisor. You’ll then have to pay a fee of $19 a month to continue this service.

YNAB: YNAB, which stands for You Need a Budget, is a good budgeting tool for those who don’t feel comfortable with connecting their bank and financial accounts to an online service such as Mint. YNAB is an offline app. You’ll have to manually enter your account information and input any purchases or deposits in the same way.

But if you’re disciplined enough to do this – and can track your funds without the benefit of the automatic updates provided by other budgeting software – then YNAB is a great alternative. That’s because the program’s budgeting software is powerful and can help you track as many categories of expenses and revenues as you can dream up.

The program isn’t free. You’ll have to pay a one-time fee of $60 for it. In addition to its budgeting features, YNAB features video tutorials and informative articles that can give users a crash course in personal finance.

BudgetPulse: There are plenty of free competitors to Mint today. BudgetPulse is one of them. This program is a no-frills budgeting tool that works just fine if you find that you aren’t using most of the extras that programs like Mint offer.

BudgetPulse is actually a good choice for consumers who only want to track their spending or savings in certain categories. When you set up BudgetPulse, you might choose, for instance, to track only what you spend on entertainment or dinners out in a given month. Maybe you’ll only track how much you spend in transportation costs or grocery shopping. BudgetPulse lets you do this easily and quickly.

You can also use BudgetPulse to set up your personal savings goals, much like you can with Mint. Once you do this, you can access graphs that will tell you exactly how close you are to meeting your goals.

Doxo: Free service Doxo is a little different from the rest of the budgeting programs out there. That’s because it’s better described as an online filing cabinet that lets you automatically pay your bills for everything from your mortgage and auto loans to your credit cards and utilities.

The goal is to store your most important household documents in Doxo’s online filing cabinets so that you always have easy access to your most important money information. You can also use Doxo to track recent payments and account balances. You can use the service to track whether you’re behind in any payments. And using the mobile app means that you can track your payments no matter where you are.


You can’t use Doxo to track how much you’ve spent on groceries for the month, but that doesn’t mean that it’s not useful. In fact, using Doxo in addition to a free budgeting tool such as Mint or LearnVest can give you even more control over your personal finances.

Inexpensive Halloween Decorating Tips

Planning on dressing up your house for Halloween -- but doing it in a way that doesn’t stick its fangs into your bank account to drain it dry. Are you also looking for Halloween décor that doesn’t make you shriek with sticker shock?

The great thing about Halloween is that things can look sloppy. I mean, did you ever see a neat, pristine haunted mansion or abandoned graveyard? Cobwebs and decay rule the day. So just by virtue of being neglectful homeowners, you could have a fabulous haunted house! Hardy har. Here are some actual ideas for low-cost Halloween embellishments.

Mummy Door

Make your home scary starting with the front door! Wrap paper streamers or white packing tape around your front door to make it look like a mummy. You may even find giant eyes to slip into the bandages for an extra-freaky effect!

Haunted Portraits

These are so hilarious, it’s scary. Do a Google Images search for “Oil Painting Portrait” or  similar, and find something that will look somewhat spooky in the right environment. Download the image, blow it up as big as you can, and print it out. Don’t worry if it’s blurry, poor-quality, or uneven: That just adds to the effect. Use spray mount to stick it onto cardboard, and make a fake-fancy gilt frame to go around it (gold spray paint topped with Sharpie details). If your crafting skills are more advanced you can create glowing eyes out of LED lights; I’m not that advanced, but if you’re full of the spirit, go for it and let me know how it works out. Hang these portraits in your newly haunted mansion… so spooooky!

Balloon Ghost

Hang up some ghosts by tying a piece of white garbage bag or paint cloth over a balloon and tying at the neck.

Mad Scientist Specimens

I know you, like me, have many large plastic toys of dubious origin. If not, there are loads of them at Goodwill or recycle shops. Pop them into glass jars, fill the jars with water, and add green food coloring. Put them in front of a spooky light source for maximum scary effect.

Zombie Trees

Head out to the woods and get some great branches, especially ones that have enough appendages to look like trees. (Note: Do not kill a tree to do this! There should be plenty on the ground!) Drag them home and stick them into buckets, planters, or other big tub-type containers filled with sand, rocks, or dirt to keep them upright. Spray paint the branches black and drape them with cobwebs. Or make them gray and hang creepy ornaments on them -- eyeballs, hands, whatever suits your fancy. So scawwy!

Spooky Alternatives to Construction Paper

I really can’t be bothered with orange construction paper. Seriously. A trip to your local

Home Depot or Lowe’s can provide you with better-value and stronger stuff for your dollar. For instance, you can get wallpaper and paint samples for $3-$5, and sometimes they’ll have a clearance bin with odds and ends that are even cheaper. Wallpaper is great because it’s so much stronger than construction paper, comes in bigger sheets, and offers textures and colors more likely to spark your imagination. Paint chips are also free, and are perfect for details (like eyes), and for mobiles, garlands, and wreaths.

The Un-Dead Lurking in the Shadows

Every other house has old clothes stuffed with newspapers, set to look like a zombie sitting on the porch. Yawn. But what if you tacked those clothes to the walls of your house so they looked like ghostly people standing in the shadows? What if you had them dancing with each other? What if you had a black dress that you draped onto a mannequin and then stood in an upstairs window, back-lit in red with parasol in hand, like a headless widow searching for her long-lost husband? (I have no idea how she lost her head. Let your imagination run wild.)

Pumpkin Candle Holder

Use a mini-pumpkin to make a cute candle holder. Carve a hole in the top just large enough to hold a votive candle. Leave plain, or draw on a Jack 'O Lantern face with a sharpie marker.  Burn the candle and let the wax drip down as shown here.

BOO

Mortgage Pitfalls

In the 1980s, there was this video game called “Pitfall.” To beat the game, you had to traverse various levels while avoiding the big black holes that would lead to your character’s demise. The more you played it, the more you got used to the challenges. You could plan ahead.

The mortgage process is the same way. It’s easier to avoid the pitfalls if you know what to expect. You can have a game plan to avoid them.

Quicken Loans Senior Purchase Banker Patrick O’Connor pointed out the most common challenges clients face and how a little preparedness can help you avoid missteps.

Gift Funds

Normally when we get a gift, we’re not supposed to consciously keep track of its value. That’s not the point. We’re taught to just let friends and family do something nice for us.

With a down payment gift, you absolutely need to document everything.

“A lot of times people are getting gift funds to purchase a home,” O’Connor said. “Maybe they’re not initially looking to do that, but a family member finds out they’re buying a home and wants to help out. We have to show a paper trail for all the money that’s gone into their account for the last 60 days.”

You can’t bring recently deposited cash to the closing table. It can sometimes complicate things because the cash used for close has to be documented and in your account for a period of time. If it isn’t, you may not be able to use those funds to finish the loan process.

Avoiding a Sour Gift

So how do you avoid a problem and still let someone help you with your down payment? Start getting everything down on paper in the form of a gift letter.

The gift letter should include, among other things, the amount of money being gifted and who or where it’s coming from, as well as a statement that the funds don’t have to be paid back.

On an FHA loan, lenders also need to see bank statements from the donor showing that they had the funds in their account for at least 30 days prior to the gift.

What do you do if you suddenly come into some money – maybe from your birthday or the holidays – that you would otherwise put toward your down payment, but can’t document on short notice?

O’Connor recommends you spend this money by taking a page out of Destiny’s Child’s book and start paying those “bills, bills, bills.”

While this can be a helpful guideline, you also don’t want to pay off something like your car or student loans in full with that money before closing. Funds used for the purpose of fully paying off accounts have to be documented.

“Avoid cash deposits that are around $400 or $500 or even a series that adds up to that,” he said. “Spend saved up cash on bills so you can have sourced paychecks build up in your account.”

Successful Sales

Another common issue O’Connor said people run into is when they sell assets in order to quickly boost the funds available for a down payment. If it’s your stuff, what’s the problem?

First, you can’t sell that pool table your wife wants you to get rid of for cash. The transfer has to be somehow documentable in the form of a check or other transfer medium that leaves a paper trail.

The second and perhaps more sticky issue is that you have to be able to document that what you’re selling was indeed yours to sell. Otherwise, the lender has to treat it like a loan, which can’t be used for a down payment.

Things like selling your used car are easier than selling something like furniture because you have a title and a bill of sale to which you can point back. Maybe you have the receipt for the pool table and a way of documenting things, but probably not. You also have to be able to show its value.

Reserves

The last important thing we’ll cover around sourced funds here are reserves. Reserves are evidence that you have the money to make your mortgage payment for a while if you lose your job or experience some other hardship.

What’s covered in your reserves and your mortgage payment in general is best remembered by the acronym PITIA. Since I “pity the fool” who doesn’t understand what PITIA stands for, let’s briefly cover it here.

• Principal
• Interest
• Taxes
• Homeowners insurance
• Homeowners association dues (if applicable)

Depending on the type of loan you get, reserves may be required. Even if they aren’t, O’Connor said having a couple months of payments can strengthen your case for approval because you look better prepared.

Appraisal Problems

If a client has an appraisal come back lower than expected, it can cause an issue during the buying process because you can’t get a mortgage for more than the value of the house.

If this is the case, O’Connor said clients have some options. The first two may not be preferable: walk away from the deal or bring the difference between the appraisal and the purchase price to closing.

There is a third option, however. You can work to renegotiate the deal with the seller. If they are serious about moving, they probably don’t want to have you back out of the deal. You also have some additional leverage because you can now point to a document that gives the house a definitive value that’s lower than the sale price.

Dodging Credit Conundrums

It’s also important to avoid doing anything that could cause a potential credit hit during the mortgage process. This is particularly important if it takes longer. You could have a bit of trouble finding a house, for instance.

Lenders try not to pull credit more than once. However, one of the more common reasons they might have to do it is if your credit report expires due to a longer loan process.

If it takes a little longer, you don’t really have to worry as long as you don’t take on any new debt that could mess with your credit report or debt-to-income (DTI) ratio. This means not buying a new car and not opening up any new credit accounts until after the loan is closed, no matter how tempting the financing deals may seem when you’re shopping for appliances.

You should also avoid charging more to credit cards and using and using too much of your available credit at any time as this can drop your score. A good guideline is to use no more than 30% of your available credit on a monthly basis. The key is really to try to maintain a status quo in your credit during the buying process.

Hopefully these tips help you get a head start in the mortgage game so you can level up and get into your own home.