Real Estate Matters
www.reporterherald.com • Saturday, October 29, 2011 • Reporter-Herald
Let children repair credit ILYCE GLINK TRIBUNE MEDIA SERVICES
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uestion: A few months ago, I purchased a Fannie Mae HomePath home at a great value, which I am renting to my daughter and her husband. I am able to rent to them at a price that helps their cash flow and credit repair process as they pay down other debt. And I make a little more interest on my investment (I paid cash for the home) than today’s money market rates. I want to sell my daughter and her husband the house at a very modest profit. But they are probably a good year away from getting their credit score up to an acceptable level. I am not opposed to acting as the bank and doing an owner-financing contract. I am wondering if there is a company that can handle payment receipts, manage the escrow accounts and disburse tax payments, HOA fees and so forth, and report their progress to the credit bureaus. I’d prefer not to deal with that. Answer: There are two parts to your question. First, you have to decide whether you are better off as the owner of the home, or as a contract seller, or as a lender. Those are your three options. Whatever you choose, you can make arrangements for your daughter to take care of all of the payments relating to the home. If your daughter and her husband aren’t very good at handling their finances, owning the home may not right for them now. You might want to continue to lease the home to them until they get their act in order. However, if they are savvy about credit and think they can handle the expenses of owning a home, perhaps now is the time to see if they can. You might reduce the rent but put them in charge of paying real estate taxes, homeowner association dues, and other expenses such as repairs. It would be up to them to make sure those payments got made on time, and that might help build up their credit history. On a separate note, there are companies out there that would allow your daughter and her husband to keep track of all payments that go under the radar screen of most credit reporting bureaus. Since homeowner association dues, some utility company payments and rent payments aren’t ordinarily reported to the credit reporting bureaus, people like your daughter and son and law might have a hard time building their credit. Recent changes to the federal law now require lenders to consider alternative forms of credit in addition to a full credit reporting produced by Equifax, Experian or TransUnion. Consumers can build an alternative credit history consisting of information on how regularly they pay their rent or car payments or auto insurance. (Full disclosure: I See GLINK/Page C6
An
Energy Star home is a better built home PAID ADVERTORIAL
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hen buying a home you may not think about durability, comfort and energy savings as your first priority. You may think about the kitchen counters, the appliances, the master suite and the overall visual features of the home. These are all important and when those features meet your needs, you need to look at what is behind the walls.
your home, keeping you warm in the winter IT IS IMPORTANT TO HAVE DUCTS and cooler in the summer. THAT DON’T LEAK Improperly installed insulaYour home’s ducts move heated tion can waste 20 percent or and cooled air to the living areas to more of the energy you pay to heat make you feel comfortable. and cool your home. Common problems can include: Windows are an important part of • Leaky duct connections your home’s beauty. But energy• Leaky return ducts efficient windows also play a vital • Furniture blocking registers role in your Energy Star home. • Leaks at furnace and duct tape Energy Star qualified windows failure feature advanced technologies such • Leaky supply ducts as invisible glass coatings, vacuumTight ducts ensure that the air sealed spaces filled with gas between that moves through the ducts is not the panes, improved framing matelost due to leaks. This makes your rials, better weather stripping and home more comfortable and warm edge spacers. Energy Star increases its energy efficiency. Sealing also helps improve indoor air quality by reducing the risk of dust, moisture, pollen and pests from entering the ducts and circulating throughout the house. It is just as important to properly size your heating and cooling system’s Energy Star qualified equipment to ensure that the system operates at peak efficiency.
DON’T PAY TO HEAT AND COOL THE OUTDOORS Tight air sealing and comprehensive insulation will keep your home from leaking. Sealing your Energy Star home helps reduce drafts and noise. Insulation works when installed properly without gaps, voids or compressed areas. It’s like a blanket for
been properly installed, the heating equipment is sized and installed properly and the ducts are tightly sealed and well insulated. This process starts with your builder working with the rater to windows can block 70 percent more select appropriate energy efficient of the solar heat gain in the summer features. With the energy efficient and reflect radiant heat indoors features selected, the builder then during winter. proceeds with construction of the An Energy Star home is verified home. by an independent third party. The Throughout the construction rater verifies that the insulation has process, the rater performs a number of inspections. After the rater completes the final inspection and determines that all the requirements are met, the rater will provide the builder with an Energy Star certificate of the home energy rating report. All of this adds up to lower homeownership costs, greater durability and better comfort when you have an Energy Star home. You do not have to know all of details. Instead, look for the government backed Energy Star label. Find your Energy Star builder at www.NoCOEnergyStarHomes.org.
Inside this week’s Fall Home edition of Home & Real Estate Wall to Wall
Winter Home Tips
Decorate your home with a variety of wallpaper
Go green and save green with tips for your home
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Front Range Gardening Carol O’Meara keeps an unlikely house pet
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Buying a home that needs work? Call the experts in FHA 203(k) renovation financing. www.HomeStateBank.com An FHA 203(k) mortgage allows you to finance both your home purchase and renovation with a single loan. Call now to learn more. Vivian DeVoe, VP Mortgage Banker, NMLS#269876, 970-227-4702 Loans and rates subject to credit approval. Owner-occupied residences only. FHA conditions and restrictions apply.
970-203-6100 Check the license status of your mortgage loan originator at http://www.dora.state.co.us/real-estate/index.htm Think big
Bank small