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Should You Refinance Your Mortgage?

Mortgage rates have dropped to an all-time low. So, is this the time to refinance your home? Um, not so fast. We talked to home loan experts and there is no cookie-cutter formula that applies to everyone.

Variables

“Everybody’s situation is different,” said Joseph Aiken at First Trust Bank, the largest family-owned bank in Philadelphia. “If you are planning on moving in two years, you may just break even and not actually save any money by refinancing. However, if you aren’t moving and you have an adjustable-rate at 3%, refinancing for a lower fixed rate is probably a good idea.”

“On the other hand, if someone has a $500,000 home with a $200,000 mortgage at 3%, they should not bother refinancing. But if they need cash to buy a summer place at the shore, it may be a good idea,” said Aiken.

What about online mortgage apps? Someone at a call center reading off a script is not going to spend the time to walk you through the possibilities. “First Trust Bank has been in business for 85 years,” said Aiken. “We are not Quicken Loans. We are a personal lending bank and I want people to fully understand my suggestions.”

Key Questions

Christine McAroy at Caliber Home Loans has questions she wants you to consider before refinancing.

  • When did you purchase your house?
  • How long do you plan to own the property?
  • Have you refinanced your mortgage after purchasing originally?
  • Are you paying PMI (Private Mortgage Insurance)?
  • What is the interest rate you are currently paying?
  • What is your goal in refinancing?

“If the borrower is agreeable, I will ask for the current mortgage statement, determine what the estimated value of the property is,” said McAroy.  “If the borrower can reduce their interest rate and the term of the mortgage or payment, it could be worth paying the cost of refinancing. I will create a closing cost worksheet for a borrower if they allow me to run a credit report. That way we can consider the advantages of the refinance,” she said. 

What is a good rate?

“This is a difficult question to answer,” said McAroy.  “Borrowers are usually only focused on the interest rate when they should be looking at the whole picture, by asking what am I paying for an interest rate.  A well-known company, which does lots of advertising on TV and Internet, automatically adds significant charges to the closing fees.  The best way to determine the cost of an interest rate is to request a Loan Estimate and or the APR.”

“Consider the customer service and responsiveness of the Loan Officer and accessibility the borrower has to their mortgage representative,” said McAroy.  “I am a little biased: the “Big Box” companies forget about their customer after the application is made.”

Appraisals

“Most times there will be an appraisal required to determine the current value of the property,” said McAroy.  “If the borrower’s goal is to eliminate PMI,  the equity position should be at least 20%.  Typically, we can lend 80% of the appraised value, but if a borrower has equity of more than 20%, there is no appraisal required.”

“At Caliber Home Loans, I use only local appraisers.  This is important,” said McAroy. “For example, I recently closed a refinance for a borrower who applied with the Rocket company. The house was under appraised by a very significant amount, so they were unable to complete their refinance.”

Refinance Calculators

Most online refinance calculators have one goal. To grab your personal data so they can follow up with annoying texts, emails, and phone calls. If you want to skip that, check out Bankrate’s Refinance Calculator which will run your numbers without requiring access to your data.

Bankrate calculator

Refinancing Fees

While refinancing can save you money in the long run, it comes with upfront fees that can be daunting if you’re not prepared These fees are much the same as you paid when you first bought your home. They include: 

  • Mortgage application fees
  • Loan origination charges and points
  • Appraisal fee
  • Document recording and credit check
  • Title search
  • Escrow costs for property taxes and homeowner’s insurance

Your closing costs will vary depending on the new loan amount, your credit score and debt-to-income ratio, loan program, and interest rate. Shopping around for a lender who not only offers a competitive interest rate but also the lowest closing fees is crucial. 

Remember, you aren’t just shopping for the lowest interest rate. You are shopping for a lender who understands your personal financial situation, long term goals and will be there for you when you need them. 

Spring Home Maintenance Checklist

While we’ve been in winter seclusion, your house has been busy responding to the elements. Rain, sleet, and snow may have caused leaks in your roof and cracks in your foundation. Uninvited guests could be nesting in your attic, chimney, or gutters. Now is the time to do a Spring maintenance check-up to keep your home energy efficient and structurally safe during the warm months ahead.

Examine Roof Shingles

Replace shingles that are cracked, buckled, loose, or are missing. Flashing around plumbing vents, skylights and chimneys need to be checked and repaired by a qualified roofer. Watch for signs that critters have created an entry into your home.

Gutters

Check for loose or leaky gutters. Improper drainage can lead to water in the basement or crawl space. Make sure downspouts drain away from the foundation and are clear and free of debris. Consider installing gutter screens or protectors to help keep debris out of the gutters.

Chimneys

If you have a masonry chimney, check the joints between bricks or stones. Have any fallen out? Is there vegetation growing out of them? This signals water infiltration. Look for white deposits that indicate your masonry joints are no longer repelling water but absorbing it.

Exterior Walls

Whether you have stucco or brick, look for trouble spots, especially under eaves and near gutter downspouts. Water stains indicate that your gutters are not adequately containing roof runoff. 

Foundations

Inspect the exterior of your home from top to bottom for masonry cracks and caulk over any small cracks. Hire a professional to come to take a look if you notice large cracks in your concrete foundation walls. 

Windows

Check all windows to make sure they open easily and close tightly. Leakage around windows will raise air conditioning bills in the summer. Check that all caulking and weather stripping is intact. Wash windows, inside and out, to remove pollen, dust, and grime. If you experienced condensation inside the glass on double or triple-glazed windows during the winter, the weather seal has been compromised and you need to replace the glass or the window.

Air Conditioning

Make sure air conditioning units are in good working order. Change the filter, check hose connections for leaks, and make sure the drain pans are draining freely. Vacuum any dust that has settled on the unit and connections; over time it can impact the air conditioner’s effectiveness. If you have an outside unit, hire a qualified cooling contractor to clean the coils and change filters.

Replace filters

Replace all filters including range hood, air vent, dryer vent, air purifiers, etc. A clogged clothes dryer vent can be a fire hazard. To clean it, disconnect the vent from the back of the machine and use a dryer vent brush to remove lint. Outside your house, remove the dryer vent cover and use the brush to remove lint from the other end of the vent line. Make sure the vent cover flap moves freely.

Clean faucets and shower heads

Unscrew the faucet aerators, sink sprayers, and showerheads, and soak them in equal parts vinegar and water solution. Let them soak for an hour, then rinse with warm water.

Test alarms

Test smoke alarms and Carbon Monoxide detectors, and change out batteries as needed. It’s cheap, only takes a few minutes and could save your family’s lives.

Basements

Dampness in your basement indicates inadequate ventilation and the need for a dehumidifier. Check the base of poured-concrete walls for cracks.  Use a flashlight to examine exposed framing for tunneling on the wood. If it’s there, call a pest control company.  

Attics

Search for signs that insects, bird nests, and other critters. Also, search for mold. Proper insulation and ventilation will deter mold growth, so take action now to prevent the problem from developing in the warmer months ahead.

Look for obstructions over vents, damaged soffit panels, roof flashing leaks, and wet spots on insulation. Keeping a good airflow will save you when it comes to cooling costs. When you’re rooting around, wear long sleeves and gloves to protect yourself from insulation.

Leaks

Check under the kitchen and bathroom sink to make sure connections on pipes and hoses are properly sealed, and look for any wetness around the dishwasher that could signal a problem. Check washing machine hoses for cracks, bulges, or dampness. The same is true for hot water heaters, which may show signs of corrosion and leaks.

Outdoor water systems and grills

Make sure outdoor water systems—pipes, faucets, and in-ground sprinkler systems—are in working order. If you have a deck, look for warped, loose, or splintered boards. If you have a gas grill, check burner jets for clogs and obstructions, and be sure that gas hoses and connections are sound and secure. For charcoal grill owners, make certain your grill is clean of ash and free of grease residue.

Rehabbing Your Rowhouse

Bringing an older Philly rowhouse into the 21st century can be challenging. We want to make it easier and more affordable. With 70 years of experience, our agents at Solo Real Estate have managed multiple home renovation projects across the city so we’re sharing some insights on what to look out for in a rehab property, and what you can expect to have to update. 

Whether you’ll be doing a gut-renovation or updating a few things, most row houses tend to have the same problems. They are dark and narrow with small kitchens, postage-stamp-size middle bedrooms, and outdated bathrooms. The secret to home renovation is knowing where and how to open up a space to more light and functionality. For that, you need to work with an experienced architect and contractor who have expertise in rehabbing homes like yours.  

Kitchens & Bathrooms

Even the most livable property usually requires a major makeover of the kitchen and bathroom. If sustainability is your goal, just say no to granite and marble countertops. “Custom made cast concrete countertops and sinks are better for the environment,” said Jayme Guokas, owner of Craftwork Design, a Philadelphia-based design firm specializing in customized living spaces. “Using cast concrete saves material from being quarried from the earth. It has a more hand crafted, warm feeling, especially with inlays of fossils, agate rocks and minerals,” he said.

When Guokas rehabbed his East Kensington row home, an 1880 structure, he conceived of it as a showcase for his business. “The house reflects my firm’s design principles as well as our ethic of sustainable building, using reclaimed and locally sourced materials wherever possible.”  

For example, Guokas used Heart Pine flooring from a South Philly factory and a former livestock tank as a shower base. The cast concrete throughout the house, on countertops, windowsills, and sinks, featured inlaid glass, stone, and antique tile. Guokas balanced the reclaimed accents and poured concrete with contemporary appliances, light fixtures and ceiling fans. Guokas also used custom cast concrete to update the kitchen of Deborah Solo.

Deborah Solo’s kitchen. Photo: Isaac Turner Photography

In his work for Parish House, a 1912 property in East Kensington, Guokas applied principles of sustainability. He created hand-troweled concrete countertops in all six units, as well as concrete sinks in two of the four bathrooms. An antique longleaf pine vanity is made from the beams salvaged from the adjacent church.

Parish House Interior by Craftwork Design. Photo: Isaac Turner Photography
Concrete Sink made by Craftwork Design. Photo: Isaac Turner Photography

Influenced by woodworker/designer George Nakashima and the Arts & Crafts aesthetic of Henry Mercer, Guokas uses birch plywood for kitchen cabinets with creative stain options. A beautiful example is the hand-stained cabinetry he completed for a house on Seventh Street.

Let there be light!

An open floor plan is a popular way to bring more light and flow into your house. Or add a skylight to the living room, kitchen, or at the top of the stairwell. When possible, enlarge windows or select a front door with a decorative glass panel. When it comes to ceiling light fixtures, consider mixing recessed lights throughout the first floor with contemporary or vintage hanging fixtures.

The lighter your walls, the more light bounces off of them. Go with bright neutrals or white. But not just any white. Sherwin Williams offers 48 shades, ranging from cool to warm.  Benjamin Moore has over 300! We recommend bright white for ceilings and a warmer white for walls. If you’d like to add a pop of color, paint an accent wall to create a focus area while maintaining a sense of openness with the surrounding white walls.

Doing away with the cramped second floor bedroom and enlarging the bathroom is an option if you do not require the room as a nursery or office. Another way to open up your home is to create a trendy roof deck with an outdoor spiral staircase.

The Rehab Bible

Before you make any decisions, read the Philadelphia Rowhouse Manual, an online, free, homeowners Bible. It clearly spells out how to approach renovations and additions, permits and codes. More importantly, it tells you how to avoid costly mistakes.

  • Don’t try to be your own contractor
  • Don’t work with relatives or friends
  • Don’t work without a written contract
  • Don’t put down more than a 20% deposit
  • Don’t release more than 95% of the total cost before all work is completed to your satisfaction

“Managing over 400 units for different owners, Solo Real Estate is positioned to help row house owners identify reputable architects and contractors,” said Alex Franqui.  “We get multiple bids from contractors. If you have a small job, it’s difficult to find a plumber or roofer. But we do enough business with them that they will handle the job.” 

Interested in purchasing a rehab property? We can help! Learn more about our buying or property investment services here, and contact us for more information.

From Renting to Buying

Renting is an excellent option until it is not. Your one or two-bedroom apartment suddenly no longer fits your lifestyle due to marriage, the birth of a child, or the realization that working from home opens the possibility of living just about anywhere. Perhaps in a neighborhood where parking does not require divine intervention, or simply because you want more amenities and a strong community like Rebecca, a longtime renter of 14 years, who made the switch to homeowner when she found a perfect fit in Kensington Yards, Solo’s condo project. Whatever your reason for making the transition from renting to buying, an experienced real estate agent can help guide you through the process and ensure everything runs smoothly.

How much house can you afford?

“First-time buyers in Philadelphia have many options in the $250,000-350,00 range,” said Solo Real Estate agent Alejandro Franqui. “In your late twenties, a two-bedroom, two-story house in Fishtown or Point Breeze will work for you. When you outgrow it, you can sell it and buy a larger house or it can become an investment property that is very rentable.” Unlike rent payments, monthly payments towards a mortgage can become a good long-term investment, generating passive income when you decide to find another home. 

An example is a two-bedroom house listed for sale at 1491 East Wilt Street in Fishtown/East Kensington listed by Solo agent Jeff Carpineta. The living room has great natural light and the kitchen features new appliances including a granite wrap-around counter and stainless fridge. But the real selling point is the great neighborhood within walking distance of trendy restaurants, yoga studios, and parks.

1491 E Wilt Street

Get pre-approved

To find out your price range, including your down payment, start by reviewing your credit report on Experian, TransUnion, or Equifax.  Next, talk to lenders to determine the mortgage rate for which you qualify. Be prepared. Banks will ask for your W2s, your last couple of years of tax returns, bank statements, and pay stubs. The goal? To be pre-approved for a mortgage before you start looking at houses. Pre-approval doesn’t mean you’re applying for a mortgage — just getting an idea of what you’re approved for. 

Now ask yourself, how much of your monthly income are you planning to spend on your home? Make sure your answer isn’t dependent on factors over which you have no control, such as fluctuations in the stock market, the economy, job loss, or inheritance that could go into litigation or simply evaporate. 

To get an idea of what you can afford, try Nerd Wallet’s Online Calculator. It uses basic questions – household income, credit score, expenses, desired Zip Code – to compute how much you can spend on a house and what your monthly mortgage payments will be. Transunion recommends keeping your total housing payment under 28% of your gross monthly income. (i.e. Say your family’s monthly gross income is $7,000, you want to keep your total housing payment including taxes under $1,960). Down payments are another factor. 20% is standard but buyers often put down 10% or less. FHA borrowers might put down as little as 3.5%. 

Select an Agent

Ideally, you want an agent with a solid track record in the neighborhoods you are considering, as well as one who is familiar with your current location. With 70 years experience in Philadelphia, the agents at family-owned Solo Real Estate have the inside track on the City’s best values and neighborhoods. 

As a result, Solo agents know a lot more than you see online. They know which areas have already peaked in home value and which are on their way up. They have also built relationships in neighborhoods across the city and can sometimes find homes before they hit the market, giving you a leg up in a competitive sellers’ market. More importantly, they have access to MLS (a Multiple Listing Service that provides information about properties for sale) and to “comps,” the history of sale prices in the area in which you want to buy. When it comes to negotiating with the seller, your agent will get you the best possible price. 

Inspection

Think of inspection as bringing the person you love home to meet your parents for the first time. You are head over heels with the house of your dreams. It has everything on your wishlist. Hardwood floors, good lighting, a modern kitchen, roof deck and parking space. Then comes the inspection to point out all its hidden flaws. Trust your agent to analyze the information. It may be a dealbreaker. Or an opportunity to ask the owner to make improvements and/or lower the price.

Closing

The closing process begins when you have signed a purchase and agreement of sale. From the signing date to the closing date can take four to six weeks. During this time, purchasing funds are held in escrow, where your money is safe until the deal is officially done. Within 24 hours prior to settlement, you and your agent will do a final walk-through to make sure the seller has completed all of the repairs required and there are no additional repairs needed. This is your cue to flush toilets, run garbage disposals, and exhaust fans, open garage doors, etc.  On settlement day, you’ll either sign your paperwork electronically or safely meet with your agent and a representative from the title company to sign and get the keys. 

Once your paperwork is done, and you have the keys, pop open that bottle of Champagne and celebrate. Your new home awaits! 

Looking to make the transition from renter to homeowner? We can help! Learn more about our buying services here, and contact us for more information.

A Guide to Your Philadelphia Home’s History

Does your home have an intriguing history? Would you like to know who were its first tenants? If so, the City of Philadelphia makes it easy to trace your house’s past via maps and archival documents, including deeds that go back to 1683. Below is a list of local resources you can use to find more information about the history of your home.  

Philadelphia City Archives

If your house was built prior to 1955, start with Philadelphia City Archives at 548 Spring Garden Street. There, archivists will conduct a detailed search for historical materials relating to the address you provide and present you with the appropriate files. You never know what you will find. The records may contain handwritten deeds, transfers of property, or architectural renderings. If you are a fan of Finding Your Roots, the PBS program that delves into genealogy, you will love the City Archives. To schedule a visit, call 215-685-9401.

Besides recording deeds, the City Archives maintains a Photo Archive of two million photographs, dating from the late 1800s, including images of the City’s architecture, industry, and culture. Tap into this fascinating resource to trace the changes in your neighborhood.

Philadelphia Department of Records

If your home was constructed between 1956 and the present, go to City Hall Dept. of Records. Since this office also contains records of births, deaths, and marriages, it may involve a longer wait than the City Archives. However, if you are nimble with technology, you can access digital property deeds online from 1683 through 1974 at the Philadelphia Dept of Records. Be prepared to buy a subscription to conduct a search and wade through a complex system of deed books. 

These deed books provide a wealth of information regarding the ownership and use of real estate in Philadelphia. The standard deed includes information on the date of the transaction, the names, residences, and occupations of the buyer and seller, the sale price, a survey description of the property usually with an indication of whether there is a building on the property, a description, called a recital, of how the seller acquired the property.

Free Library Interactive Digital Mapping Tool

If you want to see how your block or neighborhood has changed over the years, the Free Library offers an interactive digital mapping tool, dating back as far as 1843. These are no ordinary maps! They include 19th-century maps of whiskey warehouses, Fairmount Park, horse car routes, and atlases of the City by wards.

Philadelphia Historic Commission

To find out if your property is registered as historic, to nominate a property, or apply for a historic plaque, contact the Philadelphia Historic Commission. Besides designating individual properties, the Commission also lists Historic Districts and offers manuals for homeowners in those neighborhoods. Besides the usual suspects, Philadelphia’s Historic Districts include West Girard Avenue, Diamond Street, Parkside, and many other architecturally significant areas.

Looking for a home with a history? 171 Poplar Street is an 1843 Federal-Style Townhouse in Northern Liberties available for sale through Solo Real Estate.
171 Poplar Street is an 1843 Federal-Style Townhouse in Northern Liberties available for sale through Solo Real Estate.

Philadelphia Architects & Buildings

Philadelphia Architects & Buildings is also a helpful online tool to learn about the architect who designed your home. Hosted by the Atheneum, you simply enter the property’s address or the name of the architect. If there’s a match, you will have access to the architect’s resume, along with the locations of other properties he designed with dates and photos. To gain access without signing up for a subscription, sign in as a guest. 

Whether you have an old home or are looking to purchase a new place to call home, researching the property’s history can be an important step in determining its value and preserving its architectural integrity.

Fall Home Maintenance Checklist

It’s officially the first day of fall –  the perfect time for pumpkin spice lattes, haunted hayrides and fall home maintenance. While it might take a little more time for the weather to start cooling down, winter is just around the corner, and being prepared can save you time and money. We know managing the care and upkeep of a property is no easy task. Homes require ongoing supervision and maintenance to ensure that everything is working properly but there are some simple things you can do to prevent unexpected and costly repairs during the winter months. Our fall home maintenance checklist includes simple tips to ensure you’re prepared and your home runs smoothly during the winter months ahead.

Schedule Furnace or Boiler Maintenance

Schedule Furnace or Boiler Maintenance

Home heating systems involve many complex components. Just like you would change the oil or air filters in a car before a long trip across the country, homeowners should start the winter with a serviced heating system. We recommend contacting a certified heating contractor. An annual service visit usually runs around $100 in the Philadelphia area, while the peace of mind that comes with knowing that a trained professional has given one of your most expensive home mechanical systems a passing grade is priceless. However, for the intrepid DIY-er, we recommend at a minimum, changing the filters for a forced-air heating system, bleeding the radiators for a boiler system, and checking the batteries on your digital thermostat.

Apply Caulk and Weatherstripping to Prevent Drafts

Apply Caulk and Weatherstripping to Prevent Drafts

Keep the warm air inside and the cold air outside by checking to ensure that the weatherstripping around your doors is in good shape. Repair or replace damaged caulk or weatherstripping. Even small gaps can bring in a good amount of cold air. Installing door sweeps in your home this fall can also prevent chills from entering the home through the slim space beneath the door. If you have older windows in your home, you may want to consider picking up a window insulation kit and covering them with plastic insulation. The process takes about ten minutes, a pair of scissors, and a hairdryer and can keep you feeling cozy all winter long.

Drain the Hose and Shut off the Water Line

Drain the Hose and Shut off the Water Line 

For homeowners with gardens, it’s important to prevent freezing your pipes which supply the hose line. Shut off the access to the hose (in Philadelphia, most water lines are accessed in the basement). Then drain the remaining water and disconnect the hose and bring it inside for the winter.

Empty Flower Pots and Prune Trees

Empty Flower Pots and Prune Trees 

While you’re outside, take some time to empty the soil from your ceramic pots. Rapidly cooling and rising temperatures, which are common during Philadelphia winters, can cause cracking in all sorts of things (roads especially). Protect your pots so you can use them for spring flowers by clearing out the soil and trim your trees one last time before the winter months.

Clear Gutters and Drains

Clear Gutters and Drains 

For homeowners living in neighborhoods with even a moderate amount of tree cover, it’s important to make sure that gutters are cleared of leaves and debris. A buildup in your gutters can cause issues with the roof (flat roofs in particular) or cause water to spill over the gutter and freeze on the sidewalk, creating a tripping hazard. Also, for homeowners with drains in their front or back yard, it’s important to look and make sure they’re clear of debris. A blocked yard drain can turn your backyard into a skating rink and contribute to clogs in the drain line. You may also want to consider installing gutter guards. While it won’t completely eliminate the need to clean your gutters, they prevent larger items from falling in and can reduce the frequency in which you’ll need to clear them.

Inspect and Replace Winter Supplies

Inspect and Replace Winter Supplies 

Don’t forget to replace old snow shovels, ice scrapers and purchase ice melt before the snowy weather arrives. We recommend seeking out a pet-safe ice melt as some can cause irritation and other issues for our furry friends. If you use a snowblower during the winter, now is the perfect time to inspect it and make sure it’s running smoothly.