FHA Rules for Consumers to Buy, Sell Condos

Condominiums are often the most affordable home ownership option for first-time buyers, small families, single people, and older Americans, especially when purchased with low down payment FHA-backed condo mortgages, which are among the strongest performing loans in the FHA portfolio. However, FHA data show approximately 60 percent of condo projects seeking approval in 2013 were denied, that’s up from 2011 when only 20 percent of projects were denied.

Joanne Kuczma, housing program officer in the Office of Single Family Program Development at the Department of Housing and Urban Development, cited the top reasons for FHA projects being denied approval, including financial instability, pending litigation, insufficient insurance coverage, and outdated or missing documentation, among others.

“The goal isn’t to reduce FHA’s footprint in the condo market, but to ensure that homeowners are buying into a viable, sustainable homeownership opportunity,” said Kuczma. She said HUD is working hard to improve the approval process and is considering changes, such as reinstating spot approvals for individual condo units in projects that aren’t already FHA approved.

Jim Cantrell, president of Cantrell, Harris and Associates, a real estate management and consulting firm in San Francisco, agreed with the top reasons for why projects are denied and offered advice to attendees for helping get condo projects approved.

“It’s critical to ensure that all the required documents are completed and filed correctly,” he said. “My advice is to ask the right questions of the right people and get it done right the first time; otherwise the process will be prolonged and that puts the condo sale at risk.”

Cantrell said while condo boards, management companies and developers can seek their own approvals, hiring a private third-party project consultant that specializes in getting projects approved can help reduce the timeframe and increase the likeliness of approval; the cost is usually between a few hundred and a few thousand dollars.

Dawn Bauman, senior vice president for government affairs at Community Associations Institute, said condo communities have grown tremendously in recent decades, from about 70,000 housing units in 1973 to nearly 26 million units today. Her advice for buyers and agents seeking to buy in those communities is to work closely with the seller.

“The best source for information is the individual selling the unit, they are a great contact for agents and their buyers to quickly get the information and paperwork needed for approval,” she said.

NAR has advocated reforms to ease FHA’s burdensome condo financing rules to give consumers access to a wider choice of condo developments and to increase affordable financing options available to purchase within those developments. Those reforms include extending FHA’s recertification process from two to five years. To avoid a lapse, many condo projects begin the recertification process at least six months prior to the deadline, so many condo projects end up going through the recertification process every 18 months.

Another NAR recommendation is to simplify the recertification process, which requires the same amount of paperwork as the initial project approval. NAR believes employing an electronic filing system, similar to what FHA uses for its multi-family loan programs, would increase efficiency, improve data accuracy and help reduce costs.

According to Kuczma, HUD has heard the feedback from Realtors® and others in the industry and is evaluating the recertification process to make improvements and reduce the amount of required paperwork.

NAR also encourages HUD to align the condo approval standards across the housing finance system and create consistent condo approval guidelines for Fannie Mae, Freddie Mac, Department of Agriculture, Department of Veterans Affairs, and other agencies that are involved in housing finance.    
“Realtors® believe that making these changes to FHA’s condo rules will help protect the long-term value of homeownership in the country and ensure the housing recovery stays on track,” said NAR President Gary Thomas, broker-owner of Evergreen Realty, in Villa Park, Calif.

NAR has also established a working group of Realtor® members from across the country to review condo rules and guidelines and assess their impact on the market. For more information, visit www.realtor.org/topics/condominiums.

Flood Insurance Rate Uncertainty

Realtors® and homeowners across the country have been reporting significant increases in annual premium rates before NFIP rate changes took effect on October 1; this is raising concerns among consumers and Realtors® about decreased property values and a stalled housing market recovery.

Ed Connor, FEMA deputy associate administrator, Insurance, Federal Insurance and Mitigation Administration, said Congress took action to reform the NFIP and make it financially sound following several devastating storms.

“The last two major storms, Hurricane Katrina in 2005 and Hurricane Sandy in 2012 were the costliest storms in U.S. history,” Connor said. “Last year, the NFIP was forced to borrow money from Treasury; program debt is now $24 billion dollars.”

Flood insurance rates are dependent on risk levels, property type and location. Under the Biggert-Waters Flood Insurance Reform Act, rate increases for older primary residences go into effect when the policy lapses, the property is sold or a new policy is purchased.

Rates for commercial properties and non-primary residences are increasing by 25 percent per year until premiums reach the full actuarial cost. Changes to flood insurance rate maps in some communities may also affect the timing of increases, and some could go into effect immediately.

“This isn’t going to affect property owners in every state to the same degree,” said Thomas Hayes, FEMA chief actuary, Federal Insurance and Mitigation Administration. “There are going to be some counties that are harder hit than others; it’s going to depend on the location of the property and several other factors.”

Panelists told attendees that under the Biggert-Waters Flood Insurance Reform Act of 2012, homeowners could save $75,000 or more over 10 years if they build three feet above base flood elevation. Panelists also encouraged policy holders to talk to an insurance agent about their options and to obtain an elevation certificate.

NAR is a strong supporter of the NFIP and believes it is critically important to Americans and the nation’s economy since it increases the number of self-insured properties and reduces the cost of post-flood disaster governmental assistance. However, due to the unprecedented scope of premium increases, NAR recommends that FEMA take interim measures to ensure that the NFIP continues on a path towards financial solvency and actuarial responsibility without damaging the real estate recovery.
In addition to delaying future premium increases until FEMA submits its affordability study, NAR recommends that FEMA issue proposed regulations for installment payments and appeals reimbursement; and that FEMA work to improve and publicize the Community Rating System program, which encourages community floodplain management activities that exceed NFIP’s minimum requirements, and rewards participating communities with lower premiums.

Other NAR recommendations include streamlining and improving the process for obtaining property elevation certificates, and improving and publicizing information and education resources for consumers, real estate agents, lenders, and insurers, among others.

NAR also calls on FEMA to convene a summit about the impact of premium increases on property owners. At the summit, industry experts could develop valuable recommendations for how FEMA could minimize the impact of future premium increases, strategize ways to help property owners and communities lower their rates, and discuss ways the real estate industry can partner with FEMA on those efforts.

Source:The National Association of Realtors®

IRA and Retirement Plan Limits for 2014

The maximum amount you can contribute to a traditional IRA or Roth IRA in 2014 remains unchanged at $5,500 (or 100% of your earned income, if less). The maximum catch-up contribution for those age 50 or older in 2014 is $1,000, also unchanged from 2013. (You can contribute to both a traditional and Roth IRA in 2014, but your total contributions can't exceed this annual limit.)

Traditional IRA deduction limits for 2014
The income limits for determining the deductibility of traditional IRA contributions have increased for 2014 (for those covered by employer retirement plans). For example, you can fully deduct your IRA contribution if your filing status is single/head of household, and your income ("modified adjusted gross income," or MAGI) is $60,000 or less (up from $59,000 in 2013). If you're married and filing a joint return, you can fully deduct your IRA contribution if your MAGI is $96,000 or less (up from $95,000 in 2013). If you're not covered by an employer plan but your spouse is, and you file a joint return, you can fully deduct your IRA contribution if your MAGI is $181,000 or less (up from $178,000 in 2013).
If your 2014 federal income tax filing status is:Your IRA deduction is reduced if your MAGI is between:Your deduction is eliminated if your MAGI is:
Single or head of household $60,000 and $70,000 $70,000 or more
Married filing jointly or qualifying widow(er)* $96,000 and $116,000 (combined) $116,000 or more (combined)
Married filing separately $0 and $10,000 $10,000 or more
*If you're not covered by an employer plan but your spouse is, your deduction is limited if your MAGI is $181,000 to $191,000, and eliminated if your MAGI exceeds $191,000.

Roth IRA contribution limits for 2014
The income limits for Roth IRA contributions have also increased. If your filing status is single/head of household, you can contribute the full $5,500 to a Roth IRA in 2014 if your MAGI is $114,000 or less (up from $112,000 in 2013). And if you're married and filing a joint return, you can make a full contribution if your MAGI is $181,000 or less (up from $178,000 in 2013). (Again, contributions can't exceed 100% of your earned income.)
If your 2014 federal income tax filing status is:Your Roth IRA contribution is reduced if your MAGI is between:You cannot contribute to a Roth IRA if your MAGI is:
Single or head of household $114,000 and $129,000 $129,000 or more
Married filing jointly or qualifying widow(er) $181,000 and $191,000 (combined) $191,000 or more (combined)
Married filing separately $0 and $10,000 $10,000 or more
Employer retirement plans
The maximum amount you can contribute (your "elective deferrals") to a 401(k) plan in 2014 remains unchanged at $17,500. The limit also applies to 403(b), 457(b), and SAR-SEP plans, as well as the Federal Thrift Savings Plan. If you're age 50 or older, you can also make catch-up contributions of up to $5,500 to these plans in 2014 (unchanged from 2013). (Special catch-up limits apply to certain participants in 403(b) and 457(b) plans.)
If you participate in more than one retirement plan, your total elective deferrals can't exceed the annual limit ($17,500 in 2014 plus any applicable catch-up contribution). Deferrals to 401(k) plans, 403(b) plans, SIMPLE plans, and SAR-SEPs are included in this limit, but deferrals to Section 457(b) plans are not. For example, if you participate in both a 403(b) plan and a 457(b) plan, you can defer the full dollar limit to each plan--a total of $35,000 in 2014 (plus any catch-up contributions).
The amount you can contribute to a SIMPLE IRA or SIMPLE 401(k) plan in 2014 is $12,000, unchanged from 2013. The catch-up limit for those age 50 or older also remains unchanged at $2,500.
Plan type:Annual dollar limit:Catch-up limit:
401(k), 403(b), governmental 457(b), SAR-SEP, Federal Thrift Savings Plan $17,500 $5,500
SIMPLE plans $12,000 $2,500
Note: Contributions can't exceed 100% of your income.
The maximum amount that can be allocated to your account in a defined contribution plan (for example, a 401(k) plan or profit-sharing plan) in 2014 is $52,000 (up from $51,000 in 2013), plus age-50 catch-up contributions. (This includes both your contributions and your employer's contributions. Special rules apply if your employer sponsors more than one retirement plan.)
Finally, the maximum amount of compensation that can be taken into account in determining benefits for most plans in 2014 has increased to $260,000, up from $255,000 in 2013; and the dollar threshold for determining highly compensated employees remains unchanged at $115,000.

Source: Sean Henderson, Financial Advisor - Waddell & Reed 210-826-0685 ext: 140
This information is prepared by an independent third party, Broadridge Investor Communication Solutions, Inc. and is provided for informational and educational purposes only. Waddell & Reed believes the information has been obtained from sources considered to be reliable, but does not guarantee the accuracy of the information provided. This information is not meant to be a complete summary or statement of all available data necessary for making financial or investment decisions and does not constitute a recommendation.

Please note that the information provided may include references to concepts that have legal, accounting and tax implications. It is not to be construed as legal, accounting or tax advice, and is provided as general information to you to assist in understanding the issues discussed. Neither Waddell & Reed, Inc., nor its Financial Advisors give tax, legal, or accounting advice.

This information is not meant as financial or investment advice pertaining to your personal situation. The selection of appropriate investment, insurance or planning options and/or strategies should be made on an individual basis after consultation with appropriate legal, tax and financial advisors. Nothing contained herein is intended as a solicitation or an offer to buy or sell any product or service mentioned and they may not be suitable for all investors.

Securities offered through Waddell & Reed, Inc., Member FINRA/SIPC, are not insured by FDIC, NCUA or any other government agency, are not deposits or obligations of the financial institution, are not guaranteed by the financial institution, and are subject to risks, including the possible loss of principal. Insurance products are offered through insurance companies with which Waddell & Reed has sales arrangements. Guarantees provided by insurance products are subject to the claims-paying-ability of the issuing insurance company.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2013.

Housing Market Gains Forecast by Top Lenders

NAR President Gary Thomas and CEO Dale Stinton moderated the candid discussion during the “Straight from the Top: Insights from Lending Leaders” session at the 2013 Realtors® Conference and Expo, where the top mortgage industry executives expounded on new regulatory hurdles that could temporarily restrict lending to some buyers, but will likely even out over time.

The Qualified Mortgage, or ability-to-repay rule, will become effective in January 2014 and contains a number of underwriting standards that will constrict mortgage availability and deny credit to some first-time homebuyers, said Bill Emerson, CEO of Quicken Loans. The QM rule requires significant documentation from consumers to justify lenders’ underwriting decisions; lenders face strict penalties if a loan is made outside of the specific criteria.

Kevin Watters, CEO of JPMorgan Chase, agreed that lower- and moderate-income buyers, as well as self-employed buyers who don’t have a consistent flow of income, might have a tougher time in the new lending environment. “We need to work together to help first-time buyers into affordable housing options.”
“It’s important for Realtors® to be educated about the new documentation requirements so they can work with buyers and meet lender expectations,” said Matt Vernon, home loan sales executive for Bank of America.

Mike Heid, president of Wells Fargo Home Mortgage, added that Wells Fargo is using new technologies to create learning tools to help consumers prepare to be homeowners, even before they find the house they love. The new lending standards and documentation requirements are making some potential borrowers anxious about competing with cash buyers in the real estate market.

Thomas asked the panelists to share their average approval timelines.Vernon said that in California, Bank of America’s mortgage loan officers can process and approve loans in 16 days and always strive to quickly deliver approvals. He said that the approval process can move more swiftly when borrowers are educated about lender’s application requirements.

“Our mission is to get someone approved. With clarity and transparency, buyers will know exactly what is needed of them. We want to do this in a manner that is as stress free as possible for consumers and Realtors®,” said Emerson.

Heid agreed and said, “The way to compete against a cash buyer is to build a process that has no surprises as you go.”

Stinton turned the conversation to the debate over reforming the secondary mortgage market and asked the lenders whether they fear the risk of mortgage security “putbacks” and how that impacts underwriting. A putback occurs when a bank is liable for misrepresenting the creditworthiness of a borrower to the entity that buys the loan, and the bank is forced to buy back the mortgage.

Watters said fears over putbacks are real and Heid agreed. “The putback fear is still there and we’re working to put it to rest,” said Heid. “The time is right for that. If the government-sponsored enterprises weren’t in conservatorship, the issue of put backs wouldn’t be there. We need a world where everything is more of a natural market and we need competition with Fannie Mae and Freddie Mac. The conservatorship should end.”

Thomas followed up by asking whether immediate steps should be taken to reduce the government role in the housing finance market. Emerson said that the security of their guarantee needs to stay, not the actual government entities.

“I think if we want the 30-year fixed-rate mortgage, you need the government guarantee,” said Watters. “The 30-year fixed-rate mortgage needs the government guarantee because not all banks can soak up the size of the market.”

When asked whether private investors are ready to take a bigger role in the secondary mortgage market as the government’s footprint shrinks, the executives provided varied responses. Heid said that more certainty is needed before taking action.

“We’ve already started to do some private label securities,” said Watters. “People are getting back into the marketplace, which is a good thing. We might not be ready to take it all on, but we are headed in the right direction.”

The lending leaders unanimously agreed that consumers will see a healthy increase in the market next year, keeping pace with gains made in 2013. Mortgage originations will dominate the 2014 housing market as interest rates creep up and refinancing trends downward.

Heid said that while home values will continue to increase as the market continues to heal, the economy is the wild card and the downturn would be a game changer. “In spite of the economic crisis, Americans still want to be homeowners. That hasn’t changed one bit,” he said. “Homeownership is at the heart of what we do and that is worth preserving.”

Source:The National Association of Realtors®

To Buy a Foreclosure or Not?

When you buy a bank owned property, you take risks. The bank has not lived in the home and the bank doesn’t have knowledge about the home’s history. You, as the buyer, must take extra care when buying a foreclosed home. It seems that you tried to take care but still have found problems with the home.

The real question is whether the problems you uncovered could have been discovered by a reasonable home inspection. We’re not sure whether a normal home inspection could have uncovered problems with the sewer system. We know of two basic ways to discover plumbing sewer problems with a home. The first way is to have a plumbing company scope the drainage system with a camera. The second is to start using the system until you uncover the problem.

Keep in mind that a home that has been vacant for some time develops problems on its own. It’s as if a vacant home knows that it should start to fall apart. By that, we mean that the sewer system may not have been used for some time and that lack of use could have contributed to the problems you now face. Furthermore, a new family moving into a home frequently ends up using the systems of the home to a greater degree than previous owners did.

It’s not unusual to have an elderly couple sell their home to a new young family and for that new family to uncover plumbing problems. Consider that the new family may use the showers, bathtubs, toilets, laundry room, kitchen sink and dishwasher to a much greater degree than their predecessors. In this situation, a collapsed drain with some flow might not be detected by the elderly couple, but the new homeowners will certainly find it, and fast.

Turning to the electrical issue, it seems that you uncovered that problem once you dug into the electrical system in the attic. If these connections were visible without opening up walls or floors or turning over insulation, the inspector should have discovered them. Now, if you found the problem by opening up areas of the home, few, if any, inspectors could have found that out.

Sometimes homeowners or their contractors do a sloppy job of renovating a home. In many cases, poor workmanship may violate local codes and ordinances. Nevertheless, that violation may be too difficult to find in an ordinary inspection. We don’t believe that inspectors should be responsible for uncovering problems that could only have been discovered by opening up walls.

You’ll have to judge for yourself if your inspector could have or should have seen these electrical problems.

You are out about $2,000 and have the right to be upset. When you buy a home, you attempt to limit your potential exposure to these problems by hiring a home inspector. If the home inspector did his or her job and found other items that were problems with the home, he or she probably satisfied their duty as a home inspector.

As for the bank, it probably knew little if anything about the home. If the home had electrical work done, the real estate agent for the bank may have told you that electrical work had been done on the home, but the agent would not have known if it was done properly.

You certainly can talk to a real estate attorney about your complaint, but we recommend that you learn more about the issues you faced and how easy or hard it would have been for someone to find out about them. Just because you purchased a home with problems doesn’t mean that you will find a party responsible to sue and get money from. It’s quite possible that the bank has no responsibility to you and that the home inspector performed as required. If this is the case, you might be out of luck.
If you decide to talk to an attorney, find out if you will have to pay for the initial consultation. If you decide to proceed with the attorney, you’ll have to decide whom you would go after and your likelihood of success. Your likelihood of success will depend on the strength of your case and willingness to spend money — a lot of money — to go after someone.

What you may quickly discover is that suing to recover $2,000, while a lot of money to you, isn’t worth the cost or time it will take.

Source: Ilyce R. Glink.  Her latest book is “Buy, Close, Move In!” If you have questions, you can call her radio show toll-free (800-972-8255) any Sunday, from 11 a.m. to 1 p.m. EST. Contact Ilyce through her Web site, www.thinkglink.com.

Social Media Jargon: 15 Terms You Should Know

New words, phrases, and acronyms are constantly popping up across social networks. You can't afford to ignore social media, so here are 15 terms you might find useful to know.

1. Circles. These are the community groups users put together on Google+.

2. Connections. This is the online version of your business network, made up of the people you decide to "connect" with on LinkedIn. When you're a "connection" in someone's LinkedIn network, you can view their "full," profile instead of their "limited," one and send them private messages and updates.

3. Geotagging. This is adding a geographic ID to let others know your location. Found on smart phone apps for social media sites. 

4. Hashtag. A hashtag begins with a number sign followed by a word or string of words with no spaces. On Twitter, and now Facebook, this creates a hyperlink that when clicked on, performs a search for that word or phrase on the social network.

5. Meme. Rhymes with "seem." Short for "mimicked theme." A meme is an idea, style, or action that spreads virally, often as mimicry, over the Internet. It may be an image, video, hashtag, or hyperlink.

6. Pinning. This is how you show you like content on Pinterest. Once content is pinned, it appears on your own Pinboard.

7. RSS. Often called Really Simple Syndication, but actually stands for Rich Site Summary. A web standard for content delivery for everything from blog posts and news stories to images and videos. Lets you stay current with information sources without having to browse all their content.

8. Social Graph. A visual that shows all the connections an individual has within a social network.

9. Social Media Optimization (SMO). SMO is the process of checking that all the content you've created or curated is available to share across your key social media and networking sites. Types of media to check include RSS feeds, social news and bookmarking sites, as well as the social networks, video, and blogging sites you use.

10. Tag. A keyword or phrase assigned to a piece of information, such as a blog, bookmark, or digital image. It helps describe the item or topic and enables it to be found again through a browse or search.

11. Tumblr. Another blogging website and social platform. Lets users share content and connect based on their blog entries, as well as "follow" other users' blogs.

12. Tweets, Retweets. Tweets are posts on Twitter, limited to 140 characters. When a user tweets another's tweet, it's called a retweet. Credit still goes to the original user and the tweet appears as RT in the timelines of all the retweeter's followers.

13. Twebinar. This is a live podcast or audio broadcast that uses Twitter as the backchannel for discussion.

14. Viral. This describes anything that is rapidly shared across the Internet through social media, email, and video sharing websites.

15. Widget. This is a mini application that performs a specific function connecting a user to the Internet.

Social media's influence now reaches way beyond teenagers glued to their smart phones. Business professionals don't need to spend tons of time on every social network, but it makes sense to stay up to speed.

Source: Gina L. Acree. SWBC Mortgage Office: (210) 408-2600


Financial Updates for The First Week of November

Here's the breakdown of the current market indicators for your review

 DateTime (ET)ReleaseForConsensusPriorImpact
Nov 5
10:00ISM ServicesOct54.054.4Moderate
Nov 6
10:00Leading Economic Indicators (LEI)Sep0.6%0.7%Moderate
Nov 6
10:30Crude Inventories11/2NA4.087MModerate
Nov 7
08:30Initial Unemployment Claims11/2335K340KModerate
Nov 7
08:30Continuing Unemployment Claims10/262.863M2.881MModerate
Nov 7
Nov 7
08:30GDP Chain Deflator–Adv.Q31.4%0.6%Moderate
Nov 8
08:30Average WorkweekOct34.434.5HIGH
Nov 8
08:30Hourly EarningsOct0.2%0.1%HIGH
Nov 8
08:30Nonfarm PayrollsOct100K148KHIGH
Nov 8
08:30Unemployment RateOct7.3%7.2%HIGH
Nov 8
08:30Personal IncomeSep0.2%0.4%Moderate
Nov 8
08:30Personal SpendingSep0.2%0.3%HIGH
Nov 8
08:30Core PCE PricesSep0.1%0.2%HIGH
Nov 8
09:55Univ. of Michigan Consumer SentimentNov75.373.2Moderate

A Facelift for your Home with New Windows

If your windows are more than 15 years old, you may be putting up with draftiness, windows that stick in their frames, and skyrocketing energy bills. Energy-efficient windows would be a great improvement, but replacement can be very expensive, from $8,000-$15,000 or more for a typical home. For that reason, think long and hard before committing to new windows. In most cases you can get the same energy savings by investing $1,000 or so in insulation, sealing air leaks, and repairing your windows instead of replacing.

What Your Return on Investment Will Be
The range for energy-efficient window pricing is wide, but Energy Star-qualified windows start around $120 for a 36-by-72-inch, single-hung window and can go up to 10 times that. With labor, you’re looking at about $270-$800+ per window. Typically, windows at the low end of the price spectrum are less energy efficient.

But that doesn’t mean the numbers can’t make sense for you. For starters, window replacement is one of the best home remodeling projects in terms of investment return: For vinyl windows, you can recoup 71.2% of the project cost in added home value, according to Remodeling magazine’s annual Cost vs. Value Report. Based on the replacement projects outlined in Cost vs. Value that use vinyl windows, that’s a value add of about $7,000-$9,300. Plus, if you choose windows that qualify for the federal tax credit, you can effectively lop $200 off the purchase price for windows put into service if installed before Dec. 31, 2013.

You’re also likely to see modest savings on your energy bill. In general, you’ll save $126-$465 a year if single-pane windows in a 2,000 sq. ft. house are replaced with tax-credit-eligible windows, according to the Efficient Windows Collaborative, a coalition of government agencies, research organizations, and manufacturers that promotes efficient window technology.

Keep in mind, though, that the savings can vary widely by climate, local energy costs, and the energy efficiency of both the windows purchased and the windows being replaced. Finally, you may qualify for low-interest loans or other incentives offered by your local utility that can sweeten the deal, although fewer of these are becoming available.

Price vs. Energy Efficiency
The most efficient windows on the market are usually the most expensive, but it’s not necessary to buy the highest-end products to realize utility bill savings or improve comfort and aesthetics. So how do you choose the most energy-efficient models for the price?
Thanks to Energy Star, you really don’t have to. Energy Star labels will tell you whether a window performs well in your climate based on ratings from the National Fenestration Rating Council.

The Language of Windows
It’s also helpful to familiarize yourself with terms that appear on many window labels:
Glazing is simply the glass used in the window. The number of layers of glazing (single, double, or triple) doesn’t necessarily equal greater efficiency; the presence or absence of the other items in this list affects a window’s total energy performance. Glazing coatings can substantially affect a window’s U-factor, or degree of insulation against the outdoors.
Low-E stands for low emissivity, the window’s ability to reflect rather than absorb heat when coated with a thin metallic substance. Low-E coatings add up to 10% to the price of a window.
If your windows are in relatively good shape but you’d like better insulation, you can buy and apply Low-E films to your windows. They’re effective, but not as much as those put between glazing layers during manufacturing. Look for the NFRC rating on these films. Low-E films start at about $0.50/sq. ft., but you may want to check into the cost of having them professionally installed for large or complicated applications.
Gas fills typically consist of argon or krypton gas sandwiched between glazing layers to improve insulation and slow heat transfer. They often won’t work at high altitudes because differences in air pressure cause them to leak out.
Spacers separate sheets of glass in a window to improve insulating quality; the design and material are important to prevent condensation and heat loss.
Frame materials include vinyl, wood, aluminum, fiberglass, or a combination of those. They each have different strengths: Vinyl windows are good insulators and are easy to maintain but contract and expand with temperature changes, affecting the window’s air leakage; wood offers a classic look but is similarly affected by moisture changes and needs regular maintenance; fiberglass is very stable and low-maintenance but can be expensive; and aluminum is lightweight, stable, and a good sound proofer but is a rapid conductor of heat, making it a drain on energy efficiency.
Source: What You Need to Know About Buying Energy-Efficient Windows By: Karin Beuerlein
Read more: http://www.houselogic.com/home-advice/windows-doors/replace-old-windows-with-energy-efficient-models/#ixzz2iZZcAddZ Visit HouseLogic.com for more articles like this. Reprinted from HouseLogic.com with permission of the NATIONAL ASSOCIATION OF REALTORS®