A home is more than a roof over our heads. It’s where we make memories with our loved ones. Our place of refuge from the day-to-day. And our pride as we invest in its comfort, utility, and beauty.
Homeownership is also a cornerstone of closing the racial wealth gap. At HomeFree-USA, we have been advancing economic equity since 1994 through financial education and homeownership.
Here are top tips from our decades of experience to get the best and most out of your most valuable asset.
7 ways NOT to get ripped off by a contractor.
- Get a quote that’s too good to be true? It probably is.
Some contractors will under-bid to land the job or because they don’t have the skill to know better. Compare at least three quotes to get an accurate expected cost baseline.
- Make sure they get any required permits.
Some contractors try to claim that permits are unnecessary or your responsibility. Don’t be fooled! Most jurisdictions require permits for large construction projects, and the party doing the work must obtain them.
- Don’t pay a big deposit up front.
A scammer might ask for 30-50% of the job cost up front… then disappear. “Never prepay more than $1,000 or 10% of the job total, whichever is less,” Angie’s List recommends.
- Don’t take their word for it.
Verbal agreements don’t cut it. Require a written contract that includes who’s responsible for what, timeline, terms, and a detailed description of work, materials, warranties, and subcontractors.
- “Unforeseen problems” spike your job cost?
Get a second and even a third opinion before moving forward. Consult a building inspector, especially if your contractor is claiming structural issues.
- Don’t hire an unsolicited contractor.
If they “happen to be in the neighborhood” or can “give you a great deal on materials” from a nearby job… Be wary. Don’t hire anyone without doing your due diligence.
- Do your homework before hiring a contractor.
Check their reviews, industry associations, and references—and for their suppliers. Confirm licensing, insurance, and bonding, if applicable.
Is a reverse mortgage safe?
If you or someone you know are considering a reverse mortgage, you may be worried that they’re a scam, preying on elderly folks on a fixed income.
There are a lot of misconceptions about reverse mortgages. It’s a loan that doesn’t require payments… which can be especially confusing.
“When you get a reverse mortgage, you’re converting your home equity into cash,” explains Jen Cosentini, Housing Director at Cambridge Credit Counseling, a HomeFree-USA affiliate.
Are reverse mortgages safe? Yes. Are they for everyone? No. We recommend:
- Choose a home equity conversion mortgage (HECM) which is federally insured.
- Determine whether you can continue to pay real estate taxes, utilities, and maintenance throughout the mortgage term.
- Work with an impartial educator like Cambridge, who will fully inform and prepare you. (Most legit lenders require this counseling.)
Although reverse mortgages are not risk-free, there are ways to ensure it’s safe—by being well-informed before making the decision.
Need help paying your mortgage?
Denise nearly lost her home when she found herself hospitalized, unable to work. “I had no income coming in,” she said. She fell behind on her mortgage.
Denise asked her lender for help but didn’t get the support she wanted. She attended one of our foreclosure prevention webinars. After a few months of working with us, not only did Denise catch up on her mortgage, she could pay a month ahead.
“If it wasn’t for my Homeownership Advisor at HomeFree-USA, I think I would have lost my house,” she said.
If you find yourself falling behind on mortgage payments, whether because of a job loss, illness, or any other reason, the good news is that there are trusted ways to get mortgage help:
- Apply to governmental programs that prevent people from losing their homes.
- Access state grants and representatives that help homeowners pay down their mortgages.
- Negotiate better terms with your mortgage servicer.
“There’s an answer out there and a company willing to help,” Denise advises. “Keep moving until you get the answer you need.”
HomeFree-USA has helped people of color buy and keep homes for almost 30 years, with a remarkable 0% foreclosure rate among families served. Whether you are wrestling with any of the issues in this article or looking for sound, impartial advice you can trust on refinancing, home equity loans, or purchasing another home, we are here for you.
Get quick answers to your questions at no cost or obligation to you. Schedule a free homeownership consultation at 855-493-4002 or HomeFreeUSA.org.
Marcia Griffin, founder and CEO of HomeFree-USA, is a recognized homeownership expert and featured guest speaker, serving as a bridge between financial institutions and 4.5 million diverse families nationwide.