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Some mortgage lenders allow homebuyers to put down less than 20 percent of a houses purchase price, but those loans are riskier from a lenders perspective. A lender generally requires a buyer who puts down less than 20 percent to purchase private mortgage insurance (PMI) to protect the lender in case the borrower defaults or goes into foreclosure. PMI can cost hundreds of dollars per month, on top of regular mortgage payments and property taxes.

How to Get Around Paying for PMI
One option to avoid PMI is to use a piggyback mortgage. In that scenario, you could take out a first mortgage for the majority of the houses purchase price, plus a second mortgage, at the same time. Usually the first mortgage is for 80 percent of the purchase price, the second mortgage is for 10 percent, and the buyer makes a 10 percent down payment. The second mortgage and down payment together make up 20 percent of the purchase price, thus allowing the buyer to avoid purchasing PMI. The second loan typically has a higher interest rate than the first. The total payments for a first and second mortgage are often less than the cost of monthly payments for one large mortgage plus PMI.

Some companies offer lender-paid mortgage insurance. In that case, the cost of PMI is rolled into the loans interest rate. The higher interest rate applies for the life of the loan, which means you could wind up paying significantly more in interest than you would with a large down payment or two mortgages.

How Long Is PMI Required?
A borrower can ask a lender to eliminate PMI when the owner has reached 20 percent equity. Lenders arent allowed to require PMI after a homeowner has a loan-to-value ratio of 78 percent or less. That target can be reached by a reduction in principal on the mortgage(s) and/or an increase in the houses value.

If your house appreciated in value quickly, you might be able to reach a low enough loan-to-value ratio to eliminate PMI within a few years. If your house gained value slowly, it could take a long time to eliminate PMI.

Consider All Your Options
If youve found your dream house but cant come up with a 20 percent down payment, you might be able to avoid PMI by taking out a second loan if your lender doesnt offer lender-paid mortgage insurance. Compare mortgage terms from several lenders to find out how much youd pay in principal and interest. Then compare that figure to what youd pay for PMI. Also, talk to your real estate agent about trends in the local housing market to get an idea of how quickly or slowly your new home would be likely to increase in value to figure out approximately how long it would take to eliminate PMI.

This article is intended for informational purposes only and should not be construed as professional or legal advice.

Published with permission from RISMedia.

So you’ve got new kitchen cabinets. Congratulations! But now what? For those wondering how to finish their brand-spanking-new cabinets, we run down the pros and cons of painting vs. staining”the two most popular finishing avenues. The kitchen is one of the most important factors in your homes value, so consider how the following information impacts your real estate investment.

Pros for paint
– It’s flawless. Regardless of the color you choose, painting your cabinets covers up any quirks or blemishes in the natural wood, which can often be magnified by staining.

– Your color choices are endless. When it comes to picking a paint, the world is your multi-colored oyster. Get crazy and really customize the look and feel of your cabinets.

– Paint sticks to lower quality materials. If your cabinets are not made of wood (think particle board), paint is your BFF. It sticks to these materials just as well as higher grade wood options, and no one but you will know the difference.

Cons for paint
– It looks more uniform. Remember those natural quirks we mentioned? Well you may not want to cover them up. If you’re looking for a more natural, country vibe that highlights those stunning features like grain and knots, opt for a stain over paint.

– It’s pricey. While not too expensive in the grand scheme, paint is more expensive than a stain, so if budget is a concern, take heed.

– Harder to touch up. Even if you can’t find an exact match for your cabinet color, when you’re working with stain, odds are you’ll have better luck blending touch-ups in stain than with picky paint.

Source: Houzz

Published with permission from RISMedia.

In today’s day and age, choosing the right lighting for your space can be an overwhelming proposition. But it doesn’t have to be. Here are three out-of-the-box ideas you can”and should”put into play.

Light unexpected spaces. There’s no need to settle for simple overhead lighting. Up ambiance and interest in a room by lighting a strip along the floor or beneath a kitchen counter. Place rope or strip lights along the edge of your staircase for easy navigation in the dark, or add indirect lighting under or above cabinets in the kitchen.

Light in layers. When planning lighting design for a room, think lighting in three main layers: overhead lighting, task lighting, and accent lighting. Think a chandelier or ceiling fixture to cover overhead, table lamps for task lighting, and a few specialty spots for accent lighting”frame lighting around the bed frame in your bedroom, for example, or light a few of your favorite pieces of art to draw attention to them.

Dont forget to dim. Considering that dimmer switches run a scant $25, there’s no reason not to have them in your home. Control your space’s mood and ambience for a small cost, and enjoy a slightly smaller utility bill ” the American Lighting Association sites that a dimmer switch saves an average of $30 a year.

Interested in real estate and housing tips? Feel free to contact me directly.

Published with permission from RISMedia.

When it comes to home improvement, the options are endless. While many homeowners have their sights set on a huge overhaul (hello five-star kitchen complete with the latest and greatest appliances and gadgets), simple home updates that can be completed in a timely manner”without breaking the bank”typically offer the best return on your investment.

If youre itching to upgrade your home, whether with your own two hands or by bringing in a certified contractor, consider the following ideas:

Change the Hardware. If a complete kitchen or bathroom overhaul is out of the budget, dont write these rooms off your list just yet. By simply replacing the hardware (drawer pulls, knobs) and faucets, you can create an entirely different look. If youre feeling really adventurous, and in the mood for a more drastic effect, you can even paint the cabinets. Or, dress up the kitchen with a decorative backsplash that ties the whole room together.

Add a Little Paint. Do all the rooms in your home blend together because theyre painted the same color? Painting an accent wall is a great way to help a room pop. Whether its in the kitchen, living room, dining room (or any other room in the home), an accent wall is a simple way to incorporate a color you love into the space without going overboard. If youre content with the walls just the way they are, another popular alternative is to paint the ceiling.

Update the Entryway. An inviting entryway is just as important for creating a good first impression among visitors as it is among prospective buyers. Wow your guests”and even your family”with an updated facade. From (re)painting the front door to incorporating vinyl door decals to welcome visitors in style, updating the front of your home is a surefire way to create a welcoming environment.

Install Hardwood Floors. Hardwood floors are a popular choice among homeowners looking to update their space, and with a little elbow grease and know-how, avid do-it-yourselfers can complete the look with their own two hands. Tongue-and-groove flooring that fits together like a puzzle is a safe bet for anyone looking to get their hands dirty in home improvement projects this season.

Add a Porch/Patio. Whether theyre semi-enclosed, attached to the homes front entrance or built at ground level, the addition of a porch/patio extends a homes living space. From adding value to your home to upping its curb appeal, if you have the space, this is one project you should move to the top of your to-do list.

No matter what type of home improvement project you choose to undertake, its important to remember that its okay to call in reinforcement, especially when it comes to projects you might not be able to tackle on your own.

When considering completing any home improvement project, you should consider the value of hiring a general contractor, says Lance Malcolm, chief operating officer of Contractor Connection. An experienced contractor can be the difference between keeping the project moving forward smoothly or being delayed.

Published with permission from RISMedia.