With the economy in recovery, homeowner confidence is returning and we are seeing a marked increase in remodeling activity. But many homeowners are surprised to find that, even with excellent credit scores and solid incomes, financing options for a major remodeling project are much more limited now. Before the recession, lenders routinely approved loans based upon the projected value of what a home would be worth after remodeling. No more; that lending practice is dead and not likely to return soon. The new reality is that lenders will not loan against the future value of your home. For most of us, that leaves the Home Equity Line of Credit (HELOC) as the only viable financing vehicle for home improvement projects. So here are a few tips on how to navigate the HELOC process. 1. Shop carefully for the best lender: The amount of equity you can tap is restricted by the lending institution’s Loan to Value ratio (LTV). Most lenders today work with an 80% LTV; meaning the maximum amount of total debt you may secure with your home is limited to 80% of your home’s appraised value. But Federal Credit Unions often have more attractive terms. Recently some of our clients have secured loans with a 90% LTV by joining a Federal Credit Union. Don’t assume that you can’t join; you may be surprised to learn how easy it is to qualify for membership. 2. Put your home’s best face forward: Appraisers are human and subject to the same emotions as the rest of us; they will reward a well kept home with a higher appraised value. Prepare your home as though you were having an open house to sell it. Remember the three “P” rule: pick-up, put away, and primp. A neat home seems larger and gives the impression of being well maintained. And don’t’ forget the yard – a good cleanup and mulching will go a long way! 3. Brief the appraiser: Meet the appraiser personally and tell him how much you think your house is worth and why. You know the quirks of your home and your neighborhood better than they do. Don’t be shy, but don’t be aggressive; just let them know what your research suggests. 4. Help the appraiser: If you have plans of the house, make a copy for the appraiser. At the least, have a copy of your survey plat available. If you know when your home was built, tell them. Make a list of improvements you’ve made since you purchased the house (descriptions only – not dollars). 5. Challenge the appraisal: If you don’t agree with the appraisal, speak up. Don’t bother if it is a small amount, but if it is significant you should contact your lender and ask how to challenge the appraisal. 6. Phase your renovation: Many of our clients use a strategy I call the Equity Bump. Essentially, this means focusing first on projects that will have a disproportionate impact on the value of the home relative to the value invested. Then the home will re-appraise for more and you can borrow against that increased equity for the next project. 7. Repeat as necessary. I am not an expert in financing, but I deal with it everyday on behalf of my clients. Let me know if you would like to have a more in-depth discussion of financing options. I’m glad to help if I can.

Before World War II, even the simplest home boasted a bit of architectural detail and artfulness. But since then, the American home-building industry has been increasingly obsessed with the mantra of "faster and cheaper", compromising and minimizing architectural details almost to the point of caricature.

Thankfully, the tide is turning -- it seems that decades of stripped-down "Builder Colonial" homes, have left Washington homeowners starving for architectural detail. They've developed a keen appreciation for the wonderful homes of the early twentieth century, and they expect similar attention to detail from today's architects and builders.   This addition to a home in the Kenwood neighborhood of Chevy Chase, Maryland shows the difference that detail can make.

#2 IN AN OCCASIONAL SERIES

Well, I was up on the roof of that 1960's contemporary in Chevy Chase, MD again yesterday, and the problem is MUCH worse than I imagined.  In addition to water vapor questions, we now know that the roof is actively leaking at every skylight (there are ten) and at the chimney.

In every case, the problem is faulty "flashing" - the material (aluminum, copper or bituminous membrane) used to protect joints between the main roofing material and the various items that pass through the roof.  Now, I've seen a lot of roof problems over the years, but this beats them all, hands down. 

We cut test holes into the flashings and water just poured out.  Not a little trickle, but like when someone cuts an artery; the water spurted-out in streams.  In twenty five years as a residential architect, I've never seen such a total failure of roof flashing. 

This bears a quick note about flashing; in all roofing systems, flashing is inherently the the most vulnerable link because it manages the joint where the main roofing material is interrupted by something else -- like skylights, pipes, chimneys, etc.  Roofs rarely leak in the main body of the roof, but more often leak at these joints, where flashing is the primary defence.  Faulty flashing = leaky roof. 

And a word in defense of skylights:  to paraphrase the NRA, "Skylights don't leak on people -- People (installing bad flashing) leak on people".  Most modern skylights are so water-tight you could use one for a boat.  And properly designed and installed flashing WILL NOT LEAK.   So don't shy away from skylights; but DO invest in quality and make sure a true professional is in charge of specifying and supervising the installation.

Final thoughts... Do not hire a roofing contractor just because a friend had a good experience with them.  That's just putting your fate in the law of averages - and sometimes you'll wind up on the wrong side of that average.