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Nov. 27, 2017

Understanding How Home Equity Works and Why Buying a Home Can Be Your Best Investment

Understanding How Home Equity Works and Why Buying a Home Can Be Your Best Investment

 When delving into the world of real estate and investment property, there are many terms that will come up that require further explanation. Whether you’ve never heard the phrase ‘home equity’ before or you have a little familiarity, here are the ins and out of what it means and how this asset can help your financial outlook.

 All About Home Equity

 Essentially, home equity refers to your portion of the value of your home, and the amount of this figure is important because it is included among your assets when determining your net worth. If this sounds confusing, think of it this way: if you have completely paid off the cost of your home, the value of your home equity is this total amount. Of course, because most people seek a lender to borrow money from when they purchase a home, their home equity would consist of their down payment and whatever amount they’ve paid down on the mortgage since purchase.

 An Example Of Home Equity

 To provide further clarification, let’s use the example of a house that has been purchased for $300,000. In the case that a down payment of 20% has been provided at the time of purchase, the equity in the home would be $60,000. Since this amount is the percentage and cost of the house that’s been paid down, this is the amount of the house that is actually owned and this will be figured among an individual’s assets.

 How Home Equity Works

 As you pay the amount that you owe on your home each month, you are paying off your total debt and thereby increasing your equity. Since this amount of money is considered an asset that belongs to you, it can be used down the road to buy another home or invest in other important things like education or retirement. While paying off the amount owed on a home is a considerable investment, if the value of your home increases, this means that you’ll still owe the same on it but your home equity will have automatically increased.

 As an asset that is part of your financial net worth and can be used down the road to fund other investments, home equity is a very useful term to know when it comes to purchasing a home. If you’re on the market for a home and are considering your options, you may want to contact one of our local real estate professionals for more information.

Posted in Your Home Value
Nov. 27, 2017

Are You Ready to Make the Leap into Home Ownership?

To buy or not to buy
Are you ready to make that leap from living at home or renting to owning a home of your own? While everyone moves at their own pace, here are some signs that you can use to determine if it is time to own your own home. Let's take a look at some of the reasons you can use to justify your decision.

Are You Sticking Around?

If you plan on moving soon for a job or think that you won't be in town much longer, it may be better to rent. However, if you are thinking about living in the same town or within the same county for years to come, it is time to put down roots. The stability that comes with home ownership may make you more prepared for a marriage and/or a family if that is something that you want. This stability may make you more attractive if you are single and searching for a long-term relationship.

Do You Have a Steady Job?

Those who have a steady job and know that they have a stable salary may want to make the move to home ownership. As long as there aren't any other major debts eating into your income, you can probably handle a mortgage and other costs associated with home ownership. The equity that you build in your home can help you build wealth for the future if and when you want to retire. Your home may also make a great rental property in the future, which can help you diversify your portfolio and keep you solvent for years to come.

You Are Spending More Time Watching Television Shows Related to Home Ownership:

You may have caught yourself recently watching shows revolving around people or couples who are looking for homes. You may also be watching programs dedicated to giving tips as to how you can upgrade your home. If you watch these shows frequently, it may be a sign that you are ready to move out on your own and take on the exciting challenge of being a homeowner.

Are you ready to be a homeowner in the near future? Only you can say for sure if it is time to make that leap. However, those who are looking for a long-term housing solution may be ready to make that move. For more information, it may be worthwhile to talk to a real estate agent today. Call me. 

Nov. 2, 2017

5 MONEY-SAVING GREEN UPGRADES

Going green is great for the environment, but that’s not the only benefit. When you make green
upgrades in your home, it can also lead to some major savings. 
Money Saving

  1. Solar panels: The upfront cost is big, but the long-term savings are huge. Solar panels will cost
    several thousand dollars to install, but ongoing maintenance costs are very low, and a typical
    system could save you hundreds of dollars per year. You can even sell your surplus electricity.
  2. Wood furnace: Wood-burning furnaces are relatively inexpensive, and though the yearly savings
    aren’t as dramatic (about 10% on heating bills), it adds up over the long run.
  3. Insulation: There’s a good chance your insulation isn’t very efficient, especially in older homes.
    Look into installing floor, cavity, wall, and loft insulation to reduce your heating bills.
  4. Rain barrels: Rain barrels are extremely inexpensive, and provide gallons of free water to use
    when you wash your car or water your garden.
  5. Geothermal system: OK, so the price tag is scary at first. A geothermal system uses the earth’s
    temperature to heat and cool your home, but can cost $30,000 to install. But tax credits allow you
    to get a lot of that money back, and the energy savings average about $1,900 per year. If you plan
    to be in your home for a decade or two, it’s a great investment.

 


Posted in Your Home Value
Nov. 2, 2017

4 PRIORITY TASKS FOR YOUR MOVE IN

Moving into a new home is an exciting time, and you’re probably daydreaming about decor and paint
schemes and new furniture. But before you get into the fun stuff, there are some basics you should
cover first.
Tasks

Change the locks

Even if you’re promised that new locks have been installed in your home, you can never be too careful.
It’s worth the money to have the peace of mind that comes with knowing that no one else has the keys
to your home. Changing the locks can be a DIY project, or you can call in a locksmith for a little extra
money.

Steam clean the carpets

It’s good to get a fresh start with your floors before you start decorating. The previous owners may have
had pets, young children, or just some plain old clumsiness. Take the time to steam clean the carpets so
that your floors are free of stains and allergens. It’s pretty easy and affordable to rent a steam cleaner
your local grocery store may have them available.

Call an exterminator

Prior to move-in, you probably haven’t spent enough time in the house to get a view of any pests that
may be lurking. Call an exterminator to take care of any mice, insects, and other critters that may be
hiding in your home.

Clean out the kitchen

If the previous occupants wanted to skip on some of their cleaning duties when they moved out, the
kitchen is where they probably cut corners. Wipe down the inside of cabinets, clean out the refrigerator,
clean the oven, and clean in the nooks and crannies underneath the appliances.


 

Nov. 2, 2017

5 NEGOTIATING TACTICS THAT KILL SALE

Negotiation is a subtle art in real estate, but skilled negotiators can usually find some common ground
that satisfies all parties. On the other hand, using the wrong negotiation tactics can sink a deal pretty
quickly. Here are some negotiation tactics buyers (and real estate professionals) should avoid:

  1. Lowball offers: Going far below market value when you make an offer damages your credibility
    as a buyer and can be insulting to the seller. The seller has a range in mind that they’ll accept, and
    if you’re not even approaching the low end of that range, they won’t even consider the offer.
  2. Incremental negotiations: Don’t continue to go back to the seller with small increases in your
    offer ($1,000 or less). The constant back-and-forth can grow tiresome and lead the seller to
    consider other opportunities.
  3. “Take it or leave it”: Try not to draw a line in the sand with your initial offer. The seller can get
    defensive and consider other offers if you immediately show that you’re unwilling to budge.
    Even if it’s true, don’t make a show of it.
  4. Nitpicking after inspection: Obviously if inspection reveals a major issue, it should be factored
    into the final sale price. But insisting on a lower price for every minor repair can put negotiations
    in a stalemate.
  5. Asking for more, more, more: Some buyers will request that the sellers throw in add-ons like
    furniture or appliances that weren’t included in the listing. Try to avoid giving the seller a reason
    to build up resentment and think that you’re being greedy.

 

Nov. 2, 2017

SHORT SALE AND FORECLOSURE: HOW ARE THEY DIFFERENT?

As unfortunate as it can be when homeowners fall behind on mortgage payments and must face the
possibility of losing their homes, short sales and foreclosures provide them options for moving on
financially. The terms are often used interchangeably, but they’re actually quite different, with varying
timelines and financial impact on the homeowner. Here’s a brief overview.
short

A short sale comes into play when a homeowner needs to sell their home but the home is worth less
than the remaining balance that they owe. The lender can allow the homeowner to sell the home for
less than the amount owed, freeing the homeowner from the financial predicament.

On the buyer side, short sales typically take three to four months to complete and many of the closing
and repair costs are shifted from the seller to the lender.

On the other hand, a foreclosure occurs when a homeowner can no longer make payments on their
home so the bank begins the process of repossessing it. A foreclosure usually moves much faster
than a short sale and is more financially damaging to the homeowner.

After foreclosure the bank can sell the home in a foreclosure auction. For buyers, foreclosures are
riskier than short sales, because homes are often bought sight unseen, with no inspection or warranty.


 

Nov. 2, 2017

WHICH DOWN PAYMENT STRATEGY IS RIGHT FOR YOU?

You’ve most likely heard the rule: Save for a 20-percent down payment before you buy a home.
The logic behind saving 20 percent is solid, as it shows that you have the financial discipline and
stability to save for a long-term goal. It also helps you get favorable rates from lenders.
Down Payment

But there can actually be financial benefits to putting down a small down payment—as low as three
percent—rather than parting with so much cash up front, even if you have the money available.

THE DOWNSIDE

The downsides of a small down payment are pretty well known. You’ll have to pay Private Mortgage
Insurance for years, and the lower your down payment, the more you’ll pay. You’ll also be offered a
lesser loan amount than borrowers who have a 20-percent down payment, which will eliminate some
homes from your search.

THE UPSIDE

The national average for home appreciation is about five percent. The appreciation is independent
from your home payment, so whether you put down 20 percent or three percent, the increase in
equity is the same. If you’re looking at your home as an investment, putting down a smaller amount
can lead to a higher return on investment, while also leaving more of your savings free for home
repairs, upgrades, or other investment opportunities.

THE HAPPY MEDIUM

Of course, your home payment options aren’t binary. Most borrowers can find some common ground
between the security of a traditional 20 percent and an investment-focused, small down payment.
Your trusted real estate professional can provide some answers as you explore your financing options.