How far are you willing to go to protect the value of your home? So far as to boost the value of your neighbor’s foreclosed home?  Apparently, that’s what some folks are considering around the country in an effort to help their houses retain value.

I recently read an article at The Passive Dad pitching the idea of a neighborhood protecting their home equity through collective sweat equity. In the article he mentions home values dropping 40% in his neighborhood, and foreclosures cropping up around his own home.  True enough, living next to a foreclosed home can cause make your own home a tough sell, but I’m not sure how far I’d be willing to go to help a bank push through a sale.

When a foreclosure occurs the bank itself is stuck with the home and often tries to sell it for enough to pay off the remaining balance, or at least a significant amount of it.  Any amount they cannot recapture via selling winds up being written off, much to the chagrin of shareholders.  Still, unless the house was dilapidated to the point that the disrepair crept onto my property, I’d be inclined to let it stay that way.

What I would be far more willing to do would be to help my neighbors avoid foreclosure in the first place.  If financial contributions are not feasible, I would gladly help neighbors make necessary repairs, cleaning, upgrades, etc. to help get the house sold.  Imagine how quickly a group of neighbors could paint a home if everyone grabbed a roller and a brush!  Amish communities pitch in to raise entire barns in the same time!

The article raises a good point–when the dust settles from the financial downturn, will banks be less respected because of their culpability in creating an environment where interest-only and adjustable rate mortgages were oversold to those unable to afford a home?  Or will politicians, or the consumer themselves, be held to blame?  It will be interesting to see how it all plays out in time.

For most of us our home is our largest investment. The extreme temperatures in winter can wreak havoc on our homes and our wallet, so take steps to prepare your home for the winter months ahead. Even if you got a late start on winterizing your home, it is never too late to prepare your home for winter.

Prepare Your Home for Winter

1. Add some antifreeze to the base of portable basketball goals filled with water.  During winter months the water in the goal’s base can freeze and expand, cracking the base.  Purchase a brand of antifreeze that is safe for kids and animals just in case.

2. Consider a thermal insulating blanket for your hot water heater.  Hot water heaters are often the least-efficient appliance in your home.  This is especially true if your tank is store in an outdoor storage room or garage (as ours is).  When temperatures drop the tank has to work extra hard to keep the contents warm.  Consider adding a thermal insulating blanket for your hot water heat to insulate the water from surrounding temperatures.

3. Consider a tune-up on snow blowers and other snow removal equipment. Shoveling your drive is an obvious essential. Seniors or those with injuries that make shoveling more difficult should consider a service such as this Burlington snow removal company to come in and clear the driveway.

4. Add insulation to attics and crawlspaces.  Inadequate insulation in attics allows heat to rise up and out of your home in winter, forcing heating systems to work harder to keep your home warm.

5. Inspect fireplace damper to make sure it is opening and closing properly.  One year, in our old home, the damper wasn’t opening properly, but we did not discover it until we lit a fire and the living room filled with smoke.

6. Install a programmable thermostat. One of the best winterizing tasks you can do is install a programmable thermostat.  They allow you to automatically create a heating schedule for your home.  At night you can allow inside temperatures to drop down a bit, but warm things up just before the alarm clock goes off. Similarly, you can allow the temperatures to drop inside your hours when it is empty during the day, but warm things up before you arrive home from work.

7. If you vacation during the winter months, leave your heat on and set it to 55 degrees.  This will help reduce the chance of interior pipes freezing.

8. Drain gas from lawnmower and store for the winter.  It’s also a good idea to store the lawnmower or tractor indoors during extremely cold temperatures.

9. Install fresh batteries in all smoke alarms.  We change the batteries in our smoke alarms twice a year, around daylight savings time changes.  It’s a good idea to periodically test alarms to be sure batteries are still working properly.

10. Inspect fire extinguishers and recharge if necessary.  Replace any extinguishers older than ten years.

11. Insulate water pipes that may be exposed to freezing temperatures.  If water in pipes freeze, chances are the expansion will cause them to burst and you’ll be stuck with a huge bill from a plumber.

12. Caulk around windows to prevent cold air from seeping in around cracks.  If you are not sure your windows needed additional caulking, try the candle trick.  On a windy day, light a candle and place it near your window with indoor cooling/heating systems turned off.  If the flame flickers when a gust of wind picks up it is an indication air is seeping around your windows.

13. Install a carbon monoxide detector.  Gas-log fireplaces and furnaces can give off toxic carbon monoxide gases.  Follow manufacturer recommendations on placement of monitoring device.

14. If your windows are not made of newer insulated glass, consider installing storm windows.  New, energy-efficient windows often two layers of glass with insulating air in between.  Older, single-pane models allow cold air to more easily seep in and make rooms feel cooler.

15. Arrange for a professional inspection of your furnace.  Just like automobiles require periodic maintenance, furnaces require servicing by a professional.  It’s worth the cost of a service call.

16. Inspect driveways and pathways.  Patch cracks with a cement or asphalt kit to prevent water from entering the cracks, freezing, expanding and creating even larger cracks.

17. Be sure to close attic windows. Attic windows provide needed ventilation in the heat of summer, but allow warm air insulating your ceilings to escape in the winter.

18. Stock up on firewood.  Store it at least 50 feet away from your home to prevent fire and termites from coming too close to your home.

19. Apply sealant to decks.  Sealant helps prevent wood damage from extreme freezing/thawing cycles.

20. Be sure there are no flammable materials stored close to your furnace.  This one seems obvious, but many fires are started during the winter months because of flammable items being stored too close to furnaces.

21. Have chimneys cleaned and inspected.  Buildup in chimneys can lead to dangerous conditions such as fires and inadequate ventilation.

22. If you installed summer screens on doors and windows, replace them with the glass equivalents stored during the summer.  Adding the extra pane of glass back to storm doors will ad a layer of insulation against colder temperatures.

23. Clean gutters.  A clogged gutter can lead to a flooded basement when snow melts and the water has no where to run off.

24. Drain garden hoses and turn off any outdoor water faucets.  Remove nozzles or sprayers from the end of garden hoses and be sure to drain any water left in the line.

25. Bleed the valves on any hot-water radiators.  Open slightly until water appears and close again.

26. Move potted plants inside, or closer to the home to prevent damage from freezing temperatures. The temperature near your home’s exterior walls will be a little warmer than out further in your yard.  It also helps to cover outdoor plants with a sheet to insulate them from sub-freezing temperatures.

27. Clean patio furniture and store it away from winter.  In some areas winter storms are often accompanied by high winds.  During these storms, outdoor furniture can be scattered about your yard (and your neighbor’s yard).  Since you won’t likely be using it, look for a place to store it until spring.

28. Check with manufacturer to determine if spare refrigerators or freezers stored in unheated garages are safe to operate at extremely cold temperatures.  Extra refrigerators and freezers are great for stockpiling grocery deals, but if the temperature drops below the inside setting of your refrigerator or freezer it can cause the unit to operate inefficiently.

29. Seal areas around dryer vents, cable outlets and mail chutes with a caulking gun.  Look for cracks or holes around outdoor fixtures such as vents and outlets as these spaces allow cold air from outside to enter your wall space and make indoor heating less effective.

30. Insulate electrical outlets and light switches on outside walls. This can be accomplished by adding a few foam inserts around wall plates.

PMI, or Private Mortgage Insurance, is required by banks when you finance more than 80% of the value of the home.  This protects banks in the event homeowners foreclose and the bank cannot sell the house for enough to pay off the loan.  Private Mortgage Insurance is expensive, typically adding over $100 to your monthly mortgage payment.

How To Avoid Paying PMI?

One way to avoid paying private mortgage insurance is to put down at least 20% of the purchase price when buying  a home.  For example, assuming you are looking to buy a $125,000 starter home you would need to save more than $25,000 to put down on the home and finance the remaining $100,000.  This way your loan-to-value ratio on the home would be less than 80%, assuming the house does in fact appraise for more than $125,000.

If you already own a home, and are paying for PMI, the only way to cancel your policy is to drive down the loan balance below 80% of your home’s value.  That might be difficult in the current market where loan values have declined sharply in some areas.

Check sites like Zillow.com to look at recent real estate sales in your area.  If it looks like houses in your market of a similar size and location are going for enough to cancel PMI, it might be worth it to schedule an appraisal.

Contact your mortgage company and let them know you are hiring an appraiser in an effort to prove your loan-to-value ratio is under 80%, and you are interested in canceling PMI.  I recommend hiring an independent, certified appraiser because the bank’s appraisal team will have the bank’s interest in mind, and may intentionally undervalue your home.  If the appraisal proves your theory correctly, and you owe less than 80% of the appraised value of your home, submit a copy of the appraisal to your mortgage lender and follow their steps for dropping private mortgage insurance.  It will only take a couple months of paying premiums to make up the costs of the PMI premiums.