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How to Make Your Home More Energy Efficient 

As people become increasingly concerned about the impact of climate change, homeowners are growing interested in how they can renovate their homes and adopt energy efficient habits to help the environment.

In addition to substantially reducing its carbon footprint, energy efficiency in the home provides numerous benefits to the homeowner, including driving down energy costs, increasing the property value and creating a cleaner, healthier living space.

Continue reading to learn more about the benefits of energy efficiency and how you can take steps to decrease the overall energy consumption of each room in your house.

What is energy efficiency and how can it benefit the homeowner?

Energy efficiency refers to a home’s ability to use as little energy as possible. Efficiency is improved by designing, constructing, and even living in the home in a way that reduces the total level of energy consumption.

One of the greatest benefits of energy efficiency is cost savings. Homeowners can drive their monthly and annual energy costs down simply by making a few improvements. More than that, energy-efficient homes also tend to be significantly easier to maintain. That makes them more durable and sustainable over time, which could pay off if you decide to sell in the future.

Energy-efficient homes also use less water. This is especially important for homes located in parts of the country that mandate periodic water bans, particularly during the summer months. Reducing your water consumption can help you manage these bans with as little friction as possible.

Important for you and your family’s day-to-day well-being, energy efficiency can also contribute to a cleaner and safer home, providing a healthier and more comfortable living environment for everyone inside.

If you’re ready to reap all the benefits that come with energy efficiency, let’s begin at the top and explore possible ways to make your home more energy efficient.

 

 

The attic

Many homeowners don’t give their attics the attention they deserve. In terms of energy efficiency, this can be a problem because heat rises, and the attic can become a major cause of wasted energy if not properly managed.

  • Insulation. One easy way to improve energy efficiency in the attic is to add a layer of insulation to attic walls and ceilings. There could be a large upfront cost to undertake this, but it will add a significant boost to your home’s energy efficiency, which will substantially drive down energy costs in the months and years ahead. The Environmental Protection Agency estimates you can save around 15% on heating and cooling costs by adding insulation to your attic, in addition to a few other home improvements.

    • Fiberglass. If you’re ready to take the next step, the material you use can also have an impact on your home’s efficiency. Fiberglass is one of the most commonly used materials for insulation, but builders and homeowners have begun to experiment with a wider selection of materials as well.

    • Eco-friendly insulation. Cellulose insulation material, to use one example, is made primarily from recycled newspaper. Adding extra padding of cellulose insulation not only helps drive down costs directly associated with your energy consumption, but the use of recycled material also helps reduce your overall carbon footprint.

Living rooms and bedrooms

Moving down from the attic to other parts of your home, living rooms and bedrooms get more varied use and will require more sophisticated energy-efficient solutions.

  • Efficient lighting. One of the first steps you can take is equipping all of your rooms with efficient lighting. According to the Department of Energy, LED lights use up to 75% less energy than standard incandescent light bulbs and can last around 25 times as long. Not only do you get the savings associated with less energy consumption, but you also reduce waste by requiring fewer bulb replacements.

  • Windows. You can also manipulate windows to boost energy efficiency. Invest in energy-efficient windowpanes to trap heat in the winter months, reducing overreliance on central heating systems. Windowpanes can also be designed to block out the sun’s heat when it’s warmer, reducing the temperature inside the home and lessening the need for costly air conditioning.

  • Smart thermostats. These systems use artificial intelligence and machine learning technology to learn when different rooms are being occupied, using this information to lower or raise the temperature only when needed. One of the industry’s leading smart thermostat manufacturers estimates that these devices can create annual cost savings of up to $145.

  • Appliances. The TV, DVD player or computer could be unplugged when not in use. They still draw energy, called phantom power. This is an easy step to lower your electric bill!

Bathrooms and laundry rooms

These rooms are a major source of water and energy usage, and you can boost the energy efficiency of your bathrooms and laundry room simply by developing some better habits.

  • Use less water. Turn off the faucet while soaping and scrubbing while showering, and also by keeping yourself to a time-restricted shower. Turning off the water while brushing your teeth represents another important energy savings opportunity.

  • Use cold water whenever possible. Hot water requires energy to bring to the desired temperature, so cold water can help drive down costs. It’s also important to unplug all appliances when you aren’t using them. This includes electric toothbrushes, hairdryers, electric razors and any other electronic device in your bathroom.

  • Air dry when possible. In the laundry room, the clothes dryer is one of the biggest energy consumers among all household appliances, representing more than a third of your home’s energy usage, according to the EPA. Air dry whenever possible and ensure that you’re only drying appropriately sized loads to avoid having to redry clothes.

Kitchens

Many of your home’s appliances reside in the kitchen, so one of the best ways you can improve energy efficiency is to be more mindful of appliance use in the kitchen. Helpful steps you can take include:

  • Shut the stove when cooking. Every time you open your stove, you’re causing heat to escape, forcing the oven to use more energy to return to the set baking temperature.

  • Unplug all appliances. Like the electronic devices you use in the bathroom, your kitchen appliances are using energy even when they are not in use. Unplug them after each use to conserve energy.

  • Air-dry dishes. Air-drying your dishes whenever possible helps cut down on the costs associated with using your dishwasher. You can also make your dishwasher more efficient by only running it when it’s completely full.

  • Keep fridge and freezer doors closed. It can be easy to leave these doors open when you’re going in and out of the refrigerator/freezer. Closing these doors whenever you can helps prevent air conditioning loss.

  • Use the microwave. Microwave ovens use less energy than conventional ovens, so utilizing your microwave more can help conserve energy.

Overall efficiency

There are several steps you can take to boost your home’s overall efficiency.

RMS can be your partner here, as our loan officers can originate renovation loans to help finance the costs of overhauling and remodeling your home to make it more energy efficient.

Trust our team at RMS

RMS is dedicated to consistently providing our customers with a high-quality home financing experience that is both simple and easy to understand. Using the right balance of communication, technology and teamwork, our RMS loan officers will provide a home mortgage experience you can feel confident about.

So, rest assured, next time you or someone you know needs help financing a home, your experienced RMS loan officer is ready to guide you home!

Contact us today to get started.


Mortgage Speak

Breaking Down a Typical Mortgage Payment

What makes up a mortgage payment can become complicated, regardless of whether you are a new or seasoned homeowner. It’s okay if you just want to know the monthly amount you owe and not delve too deep into the financial concepts. For those of you who want a few more details, it’s important to understand exactly how mortgage loans breakdown as a consumer.

If you've ever heard your loan officer mention something called a "pity payment" and scratched your head trying to figure out where the need for "pity" came into the equation, you're not alone. What they were really saying was "PITI," and they were talking about Principal, Interest, Taxes and Insurance, which are the four main components that make up a typical monthly mortgage payment.

While PITI is the typical, and commonly assumed makeup of a mortgage payment, some loan programs could include other elements. Based on your property and loan type, your monthly payment may also include mortgage insurance. For the most part, though, PITI is what you'll be looking at when planning your mortgage and the monthly payments to come.

Let's take a look at a typical PITI monthly payment breakdown:

PRINCIPAL: The principal is the amount that pays back and reduces the mortgage loan balance. As time passes, the amount you pay in principal each month will increase as the interest amount decreases.

INTEREST: Interest is the ongoing cost of borrowing the money in a mortgage loan. As time passes, the amount you pay in interest each month will decrease while the principal amount increases.

TAXES: Real estate or property tax amounts are decided through your property assessment. The taxes due for your property will be the same amount regardless of the size of your mortgage. The tax portion of your mortgage payment is typically held in an escrow account that makes sure your taxes are paid on time.

INSURANCE: Homeowners or hazard insurance amounts are decided by the coverage plan you choose with your insurance company. This part of the mortgage payment is not affected by the size of your mortgage. Insurance payments are typically held in an escrow account that makes sure your insurance is paid on time. Some loan programs also have mortgage insurance, which is affected by the size of your mortgage. Mortgage insurance is insurance for the lender, should you default on (stop paying) your debt obligation.

For more information, check out this article.

Things to Know

There are other calculations and fees that will impact your monthly amount due when figuring out your mortgage and the financial responsibilities it requires.

Loan Amortization Calculator 

This is referred to above in the principal and interest section. Over time the mortgage loan is amortized, which means the mortgage debt is gradually reduced over the loan term, taking interest into account. Each month your mortgage payment has a portion that goes toward principal and a portion towards interest. In the beginning most of your payment is going towards your interest and when you are reaching the end of your mortgage, you will be paying more principal. You can plug in your numbers into this amortization calculator to see how your allocations change over time with regards to principal and interest.

Mortgage Insurance

Private mortgage insurance, also known as MI, is to ensure the lender is protected. No, 20% is not needed for a down payment on a home, but typically if your down payment is less than 20%, you will also need to get mortgage insurance. Although it does make homeownership within reach for some who do not have the 20%, it also increases your monthly payments. Mortgage insurance will be a percentage of your principal and is typically paid monthly, but there are other options. Take a more detailed look at MI here. (can link out to new one once published)

Homeowners Association Fees (HOA)

Although not part of your mortgage payment, it could be an added financial obligation, depending on where you decide to call home. An HOA fee is typically associated with a community. It will go toward any shared facilities and property ground maintenance. Depending on the size and quality of your community, this may add a substantial amount to your overall housing costs.

Why Understanding This is Important

It's good to understand how this all comes together when you're considering how much you can afford and, if hunting for a new home, where you want to search. For more peace of mind, read up on how you can plan for extra home expenses.

Imagine this scenario: You are pre-approved for a mortgage, the monthly payments are within your budget, and all you must do is find the perfect home. You find that home, go back to your loan officer, and find that the monthly payments suddenly jumped up past your comfort level. What happened? Is your loan officer playing tricks?

Not at all. If you had been paying attention to property taxes while you were doing your home search you may have noticed that the property taxes on this must-have home were significantly higher than what had been estimated. Loan officers generally make it their business to get those estimations as close to local averages as possible, but it can happen that a certain municipality happens to have a higher rate than the others around it. The same can happen with homeowners' insurance. Not all insurance companies have the same prices, and each property and situation will be just a little different. Your loan officer will do their best at estimating during your pre-qualification, but until you have those real numbers it's just a "best guess."

Bring Your Questions

It may seem like a lot to keep track of, but don’t let that deter you from finding your dream home in a price range you can afford. You'll be happy to know that you have allies. Your RMS Loan Officer should be able to help you with any questions you have and supply you with information that you can read over at your pace. If you're working with a real estate agent and an insurance agent, they should be valuable resources for your questions as well. All these professionals have made it their business to know this stuff inside and out, and they're there to help you. Bring your questions.

And now, knowing what you do, you can tackle this mortgage planning stuff with full awareness of how each of these pieces fit into your overall monthly payment picture. There's no need for pity here. Just some good old-fashioned self-confidence, knowing that you've got this.


Helpful Tips

Home Improvement Tips

May 28
8:00
AM
Category | Helpful Tips

Home Improvement Tips

Buying a home is one of the biggest financial investments you’ll ever make. Unlike in a rental situation, the on-going maintenance and upkeep of your home falls squarely on you. It’s something you should plan and budget for, in part because you want to live in a safe and up to date home. It is also because you might not live in that home forever, and you want to protect its re-sale value when the time comes.

Everyone loves watching those shows on HGTV where it only takes an hour to see a before and after of a brand-new kitchen, or a fully landscaped backyard. The truth is, no matter the project, big or small, it takes planning. So, get your creative juices flowing for some great brainstorming, there is a project for every do-it-yourself warrior!

Home improvement projects can vary depending on what you are looking for. Are you looking to make your home more aesthetically pleasing and show versatility? Or maybe you are looking to invest in a project that will add to your home’s overall value? Either way we have some things to consider as you make your way through the world of home improvement.

Styling Your Space

Starting small. If you are hesitant to start a larger renovation project, tackle household projects with smaller, overlooked spaces. These projects can be budget-friendly and fun to do over a weekend.

  • Curb Appeal:

    • Design: framing your front door to coordinate with your home style will dress up your curb appeal. Adding plants, unique exterior lighting, and even house numbers will create a polished look as you enter the home.

  • Entryway

    • Storage: your entryway is one of the first things people see when they walk in. Create a storage system, so your loose shoes and jackets have a place to live. Kids would love to have cubbies of their own.

    • Design: add millwork to your entrance. Keeping the style as you come from outside will add a layer of luxury that visitors will instantly notice! Try layering pieces around the entryway for a more dramatic look.

  • Kitchen

    • Storage: ample kitchen storage is always a great selling point. Take advantage of an unused wall or corner space. Install open shelves for your most commonly used cookware.

    • Design: use the space behind the open shelves to add a fun wallpaper print or backsplash. Adding an extra element of design will draw the eye around the room.

  • Living Room:

    • Storage: books and display pieces can add interest to your living room. Adding baskets or boxes to shelving gives dimension and you can store items out of sight.

    • Design: transform your room with crown molding or trim work. You can achieve a brand-new look in one weekend!

  • Banish Clutter:

    • Storage: getting rid of unused items is the first way! Here are some tips on eliminating clutter and how to keep it that way.

Projects that Add Value

If renovation or remodeling is in your plans, you’ll want to mitigate costs as much as possible. Depending on the material used and the magnitude of the project, home renovations can cost tens of thousands of dollars, an amount that few families have readily available. That is where an FHA 203K loan with RMS might make sense.

As you are brainstorming about your end goal, you might want to figure out how much you will reap the benefits of costly projects. We broke down some benefits for a few scenarios below. For a more comprehensive list, and financial breakdown, visit Remodeling Magazine for the up to date 2021 data.

  • Garage Door Replacement: If your garage door gets a lot of wear of tear, it might be worth replacing. Garage doors have been the highest ROI for several years. Coming in at an affordable cost to replace, the value of the door almost pays for itself.

  • Remodel the Kitchen: Many buyers are looking for a modern, updated kitchen. When remodeling, start small. Replace the faucet, add new hardware and replace light fixtures. You could paint the cabinets instead of installing new ones. If you’re going for a complete overhaul, don’t go overboard. You may recoup a large percentage of your investment, depending on the value of your home.

  • Upgrade Appliances: This may go hand in hand with kitchen upgrades, but you could focus on matching and modern appliances. It gives your kitchen a more cohesive look, and if they are energy-efficient models, they will be better for the environment and save on your monthly expenses.

  • Windows: Quality windows are an investment that can’t go wrong. The ROI for good windows is about 69% according to Remodeling Magazine in 2021.

  • Remodel Attic or Basement: adding usable square footage with an add-on could be costly. Converting the basement or attic into a versatile space will add more appeal to potential buyers. 

  • Boosting Curb Appeal: First impressions mean a lot. Enhancing your exterior could be as simple as power-washing the siding, installing a new front door, or pruning shrubs, and adding a flower garden. It doesn’t need to be expensive to boost that wow factor!

Projects that May Negatively Affect Value

Certain projects might have a negative effect on the resale value of your home. A general rule of thumb is less is more. Lower-cost, less customized projects generally reap more significant returns. It doesn’t mean you can’t do your luxury renovations, just keep in mind the buyer may not see the appeal and may not be willing to pay additionally for these additions.

  • Swimming Pools: In-ground swimming pools are a nice to have. Depending on where you live, they might be used more than a few months out of the year. Buyers with children might think of it as a safety hazard, and some may not want to pay for the additional costs of keeping up a swimming pool.

  • Luxury Upgrades: If you are thinking about selling in the near future, you may want to think twice about the high-end additions. Invest in quality appliances, flooring, and upgrades that will appeal to all buyers.

  • Garage Conversions: Most buyers want a garage for their car or storage. Upgrading your garage into usable square footage might not attract buyers. Keep track of what your neighbors do. You don’t want to be the most expensive home on the block.

What If You Need To List Quickly?

If your budget won’t allow for repairs, and you need to sell your home, you have options.

  • Sell as-is: Make it clear to buyers you won’t be making any repairs. You will need to adjust your listing price based on what necessities need to be done to the home. Buyers may try to negotiate based on the “sell as-is” offer, especially if the repairs are lengthy.

  • Offer a credit at closing: If the home inspection uncovers unforeseen issues, you can offer a credit that will allow the buyer to make the repairs after closing.

  • Other options: There are real estate companies that will buy your home and quickly. Zillow Offers will give you a cash offer and take the stress off showing, repairing, and managing your home for sale. These offers may be at a much lower price than you would typically sell, but if the need is there, it might be what you are looking for.

At the end of the day, it’s still your home. Enjoy where you live and be aware of projects that might be costly to you and not add value to the house. If you are in the market to sell your home and don’t know what projects would be best for your budget, get an inspector to come out and assess your home.

This might also be helpful if you are looking to refinance. Adding value to your home will mean you will have more equity and a lower loan-to-value ratio. If it is early on in your mortgage, depending on the financing you have, you might be able to cancel your private mortgage insurance. If you have any questions regarding refinancing, the Loan Officers at Residential Mortgage Services will be glad to answer any questions. Contact us today to get started!


Things to Consider

Planning for Extra Expenses of Homeownership

Buying a home is one of the largest purchases you’ll ever make. It’s fair to say everyone has a different view of affordability and what fits into your monthly budget will vary. Figuring out that sweet spot requires more than a pre-approval and a monthly mortgage payment.

If you don’t follow a formal budget, there could be some opportunities for you to control your spending and saving. Budgeting is an important part of preparing yourself for purchasing a home. It allows you to look at the reality of your finances and plan for unexpected costs.

Read below for some tips on how to budget for homebuying and maintenance.

Preparing to Buy a Home

Owning a home, and property, includes upfront expenses, like closing costs, and ongoing costs, like maintenance and property taxes. Aim for a monthly mortgage payment that won’t stretch your budget too far, along with some cushion to handle emergencies and other unexpected fees.

  • The 28% rule is a guide that determines how much home you might be able to afford.  According to this rule, you should not spend more than 28% of your income on your mortgage. This includes all mortgage fees and insurance.

  • Breaking down your mortgage payment includes the principal, interest, taxes, and insurance. You may be required to have mortgage insurance if your down payment doesn’t meet certain financial criteria. This is to protect the lender in the event you are unable to repay your loan.

  • Your other existing debt, and recurring debt, will also be factored into the equation. Your debt-to-income ratio can help determine what good and bad debt you have and how that will affect your mortgage.

  • Do your research. RMS mortgage calculators make it easy to explore different scenarios. Take a look at the different resources RMS provides to help you make important financial decisions about your mortgage.

Plan for Expenses and Maintenance

You may already have been covering household expenses such as electricity, water, heat, etc., if you were renting and if some of those were included in your rent, be sure to add them to your future homeowner budget. Home maintenance helps your home run efficiently and keeps your house in good condition. There are a few popular rules of thumb used to estimate how much homeowners will spend annually on home maintenance.

  • The 1% Rule: Budget 1% of the purchase price of your home each year to go towards home maintenance.

  • The Square Foot Rule: Budget $1 per square foot of your house per year for maintenance and home repairs.

Keep in mind that these general rules for home maintenance and repair budgets DO NOT take into consideration many factors like the age of your home, the location, the weather of the area where you live and the condition of your house. All these factors can affect your yearly maintenance and repair expenses.

Prepare for new household items

There are many items that first-time homebuyers may need to purchase for their new home. See below for a list of some of the popular items new homeowners buy within the first few weeks of moving in.

Must Have:

  • Home safety – Start safe with these suggested tips on keeping your security top of mind.

    • fire extinguisher

    • smoke and carbon monoxide alarms

    • new locks and keys

    • curtains, blinds, window coverings, and light timers

    • First-aid kit

  • Light bulbs – LED bulbs are better quality and have a longer lifespan.

  • Maintenance and Upkeep:

    • snow shovel (if applicable)

    • tool kit

Nice to Have:

  • grill

  • garden hose, rake, garden tools

  • lawn mower (if applicable)

  • new furniture

Our Road to your New Home pamphlet lays out each step for the homebuying process. This may give you insight into when you should consider buying these must-haves and nice-to-haves, keeping your budget in mind.

Making sure things like maintenance, repairs, and additional household items are included in your budgeting will help you decide how much home you can comfortably afford. It pays to speak with local experts early in the homebuying process so you can focus on the right price range and buy your dream home.

Once you feel comfortable with your expenses and your budget is on track, it’s important to review it periodically during the year. Set up a quarterly review and you might be surprised when and where you can move money around. There are a lot of steps in buying a home. RMS wants to make sure you feel comfortable before you sign on the dotted line and have a positive homeownership experience.


News

PHFA Recognizes its Top Lending Partners for 2020

Residential Mortgage Services is excited to announce Pennsylvania Housing Finance Agency (PHFA) has recognized RMS as its #4 top lending partner for 2020. During the virtual Annual Homeownership Awards event, RMS was also honored in the special category for Most New Construction Loans.

For more details and a complete list visit Press Release (phfa.org)

Pennsylvania Secretary of Banking and Securities Richard Vague also honored the awardees during a videotaped message. “The lenders being recognized play a critical role in empowering and supporting homebuyers and homeowners across Pennsylvania,” said Vague. “Their tireless efforts have helped so many Pennsylvanians realize the American dream of homeownership.””


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