Home Equity Loan Facts

You may have heard of a home equity loan, but you may not know what it actually is. A home equity loan uses the accrued value of your home as collateral against a loan, and typically allows you to borrow up to 85% of the difference between the home’s value and the balance due on your mortgage. If you fail to pay back your loan, you may have to sell the house to pay it back. This is similar to a home equity line of credit (HELOC), but unlike a HELOC, a home equity loan is a one-time event with a fixed interest rate. The interest rate tends to be higher than the rate for a standard mortgage loan, but lower than rates for most credit cards. Normal regulations for mortgage loan approval apply to home equity loans as well.

A home equity loan is frequently called a second mortgage. Homeowners frequently still have some balance due when they take out a home equity loan, which means they now effectively have not one but two mortgages. In addition, the money is often used to finance the down payment on a second home. However, this isn’t the only purpose of a home equity loan. You don’t need to have a mortgage to get a home equity loan — if you don’t have one, it just means your balance due is zero, and therefore there is potentially a higher ceiling on loan amount. Furthermore, the money gained from a home equity loan doesn’t need to be used for a second home, or anything relating to homes. It’s simply your money, and can be used without restriction.

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Get Everything Prepared Before Renting Out Your Home

Renting out your home, especially for a short period, can seem like a simple way to turn a profit without much effort. However, there’s a fair bit that goes into getting the home ready to be rented out. Just like if you were selling your house, you need to make sure there’s interest, which means making a good impression on potential renters.

The easiest way to do this is by repainting your home, which is something you’d probably do if you were selling as well. It may even be more important when renting, though, especially if you aren’t going to allow your tenants to repaint. Buyers may think they’re just going to repaint anyway, so they don’t care what color the walls are. But with tenants, you want to be sure to choose neutral colors that won’t offend anyone’s aesthetic.

You should also be sure that all the legal details are worked out. You may feel the desire to skip the middleman, but that’s not a good plan. A real estate agent will help draft a lease that protects both you and the tenant. Property management companies remove much of the headache of being away from the property. Regular maintenance can often be left to property management companies. That said, if the house is not in good condition from the outset, tenants won’t be interested enough to sign a lease. Make sure to take care of repairs before you start.

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Tips For Vinyl Flooring Maintenance

Vinyl has become a very popular option for flooring. It has a few important advantages going for it. Vinyl floors are both cost effective and durable, making them an attractive alternative to hardwood flooring. Many people also consider vinyl to be aesthetically pleasing. However, you can’t take advantage of that durability if you don’t know how to take care of it.

Spills and stains can become permanent if not dealt with quickly. Start by just wiping it up with clean water, then switch to a vinyl cleaning solution if you have one. For tougher stains, you can use a paste made with baking soda and water. Rub the paste into the affected area, let it sit for a few minutes, then wipe it up. If that doesn’t work either, try rubbing alcohol. As for regular maintenance, you should be sure to mop or vacuum the floor at least once per week. Wax polish isn’t necessary, but you should occasionally clean the floor with a mixture of baby oil, vinegar, and water.

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Consider Renting Out Your Home During Extended Vacations

Most of the time, vacations don’t last that long — a few days or maybe a few weeks. Homeowners are generally okay with leaving their homes unattended for that length of time. But what if you’re vacationing for the entire summer or winter? It’s simply not practical to leave your home vacant for three months or longer. You may want to rent out for home for the length of your vacation.

A three-month rental contract may not seem like a long time, but is actually considered a long-term contract, not a short-term contract. So it’s not any more complex of a process than any other standard rental contract. The most obvious benefit is the income generation, but there are less obvious reasons to want to keep your home occupied. Vacant homes are the primary target for burglaries, so if you have tenants in your house, you’re less likely to be a victim of crime. Tenants can notify you of any problems that arise, and also take care of regular maintenance such as mowing the lawn, though you should make sure to include this in the contract.

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What Is A Drive-By Appraisal?

In most cases, getting a mortgage loan requires a home appraisal. Usually, this is a rather long process that involves extensive analysis of a home by an appraiser, inside and out. But sometimes the process can be expedited by using a drive-by appraisal, in which the appraiser only looks at the home’s exterior. The other advantage, besides the speed, is that it’s much less invasive for any current occupants, especially if they are tenants. Of course, this is at the cost of a much less in-depth evaluation.

Also, it’s not always possible to get a drive-by appraisal. It’s essentially at the discretion of the lender whether a drive-by appraisal is allowed. If the lender wants a full investigation, they simply won’t approve the loan. That said, more and more lenders are permitting them as a result of COVID, since evaluating the interior can be risky. Lenders are also more likely to allow a drive-by appraisal for a refinance as opposed to a new loan.

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Tips to Reduce Renovation Costs

Renovations can be expensive. Even if you can afford it, lowering the costs may end up being a better return on investment, even if the renovation is less extensive or lower quality than you wanted. Of course, if you can do the renovations yourself, that is by far the cheapest — though most time-consuming — option. But even hiring contractors has the potential to be much cheaper than you’d think.

When performing home renovations, the immediate assumption is that all the additions are going to be brand new. That doesn’t have to be the case. Gently used products may still be better quality than what you have now. The contractors you’re hiring may even have just taken some cabinets from a previous client — ask if they have anything suitable on hand that they would need to get rid of somehow anyway. You may even be able to do everything through one contractor. Though you’re still paying for every renovation, you may avoid repeated fees by not being charged by multiple companies. Of course, you may have to scale back your renovation plans to do this. Not every company is willing or able to perform every renovation.

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Helpful Websites to Protect You From Crime

One of the most sought-after pieces of information to learn about a potential new neighborhood is the crime rate. No one wants to move to an unsafe area if they can avoid it. Even if you are required to move there because of a situation outside your control, you’ll want to know what you should be on the lookout for and how prepared you need to be. There are a few different websites to help you learn more about crime in your new neighborhood.

SpotCrime and CrimeReports are very similar. Both allow you to enter an address and gain an instant report of recent crimes in the neighborhood. They also both allow you to sign up for alerts. SpotCrime additionally lets you provide information to help others anonymously. Neighborhood Scout provides per capita crime rates in any neighborhood you select, not just your own, and also has a comparison feature that allows you to find other neighborhoods with similar crime rates. Family Watchdog has a more narrow purpose. It specifically looks for the locations of registered sex offenders and informs you if one is living in the area.

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Explaining Breach of Contract Liability

With high interest rates, more and more buyers are beginning to realize they can no longer afford to buy, or would prefer to buy something less expensive. Sometimes this moment of realization hits them after they’ve already signed a purchase agreement, and now they want to back out. This is entirely legal, but does come with some potential costs.

When prices are increasing, breach of contract isn’t a huge deal, but can annoy sellers who have to delay their home’s sale. But when prices are decreasing, as is beginning to happen now, sellers have more to lose. Which is why they have a few different options to remedy the situation: they can enforce the purchase agreement, relist their property, or just withdraw the listing and wait for a better time. If the seller chooses to relist, they may be entitled to compensation from the buyer who breached contract. If the profit from the sale after relisting is less than what it would be given the original contract amount, the amount of the buyer’s deposit that would be returned to them is decreased by the amount of the seller’s losses. There may be cases in which there was an agreed-upon limit to this amount, in which case the agreed-upon limit is used, plus an interest rate of 10%.

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More: https://journal.firsttuesday.us/buyer-breach-of-contract-in-a-decreasing-price-environment-seller-remedies/

Frequent Mistakes of First-Time Sellers

There’s a lot of talk about first-time buyers, from their impact on the housing market to advice to help them secure the home they want. Not as many people talk about first-time sellers. Of course, many first-time sellers already have some experience with the real estate process. They probably bought the house they’re trying to sell, though it’s possible they inherited it. But that doesn’t mean they have experience with selling, and they could still make mistakes.

First-time sellers are often thinking about how much money they can get, rather than whether or not they even can sell successfully. While getting too little money for the sale is a bad idea, you won’t get any money at all if your house doesn’t sell. Instead the primary focus should be on making sure you get offers, then you can enter negotiations. Don’t try to cut corners by selling without an agent. It is an extra expense, for sure, but most prospective buyers won’t even know your property exists without the help of an agent. The agent can also help you set a realistic listing price. If it’s too high, you won’t generate interest, and if it’s too low, people will assume there’s something wrong with the property. Even once you get offers, don’t just pick whichever offer is highest. Take a look at the terms of the offer. The buyer could be asking you to pay for certain costs, which could make a slightly lower offer actually a better deal. In addition, a slightly lower full cash offer avoids financing headaches and possibly some closing costs.

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Off-Market Homes Aren’t Necessarily Off-Limits

If you’re in a situation in which you think you’ve settled on an area for your new home, but aren’t getting your offers accepted, you may need to think a bit creatively. Chances are you’re only looking at homes that are currently listed for sale. This may seem obvious, but it’s not the only possibility. Though it most commonly only happens between people who already know each other, it’s not illegal to make offers on off-market homes.

A good way to skirt the opposition is to look for recently expired listings rather than active listings. Your agent can easily set up this search for you. If a listing expired recently, it means the seller probably did want to sell, but wasn’t getting offers. It could also mean the seller wasn’t very serious about selling, but you won’t know which unless you contact them yourself. There’s also another option that’s less likely to work, but more likely to get you what you want if it does work. If you see what you think is your dream home, but it wasn’t on the market at all, you can still try contacting the owner. For the right price, they may be willing to sell even if they weren’t trying to. There are certainly some homeowners who aren’t listing their home only because they think they won’t get a buyer.

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Open Houses Are An Opportunity Even If You Aren’t Buying

It’s rather common for neighbors to get curious about open houses and just pop in for a look. Most of the time, they aren’t planning to buy anything, let alone a house right next to where they already are. This has the potential to frustrate some sellers who are perceiving more interest than there actually is, but the neighbor is not necessarily simply being a nuisance. Open houses are an excellent opportunity for people planning to sell, as well.

Buyers usually don’t look in their own area, but as a seller, you can definitely use prices in your own area for a general assessment of the value of your own home. This is especially true if the homes are similar, but even a vague less than/greater than guess is better than nothing. Just keep in mind that it’s only a loose estimate. The price point isn’t the only information you can gather from an open house, though. Recently remodeled homes are great pointers for current trends, and can help you decide on how to remodel your own home. You can also pick up general decor tips. Even the things that you find wrong with the house can tell you what not to do.

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Should You Skip the Starter Home?

It’s pretty typical for first-time homebuyers to purchase a starter home, one that is cheaper and smaller, but that they aren’t planning to live in for an extended period of time. First-time homebuyers expecting children soon, or even who already have children, will instead tend to purchase a larger home that their kids can grow up in. But kids aren’t the only reason to skip the starter home, if you are able to afford something better.

While it’s true that any home you live in will build equity, this is mostly proportional to the value of the home and time owned, barring dramatic shifts in neighborhood desirability. Therefore, a cheaper home that you live in for only a few years will build less equity than a more expensive home that you live in for decades. In fact, if your time spent there is unusually short, it may not even cover the costs of selling the property. There are also less tangible benefits to going straight for your forever home. Getting settled in a community can take a number of years, especially in high-density areas where there is typically a larger percentage of low-income housing than in medium-density areas. If you’re moving out in a few years, you may never feel established as part of the community or be able to form lasting connections.

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Skip These Upgrades if You’re Looking for Return on Investment

It’s common for sellers to perform a few upgrades to their home just prior to selling, in the hopes of fetching a higher price. But there are some upgrades that simply aren’t worth it. Of course, if you’re planning to stay living there, you can go through with these upgrades for yourself. You shouldn’t expect them to help you get a profit, though.

Bathroom remodels are tricky. While remodeled bathrooms are appealing to buyers, they’re also rather expensive. The return on investment usually isn’t very high. Also, if any problems arise, it could result in a much larger amount of time and money spent than expected. This could delay the sale significantly and reduce your profit, even if the end result does bring in interested parties. Living room updates are neither in high demand nor quick. Moreover, if it’s not done in a way potential buyers would want, it could actually reduce interest. While many people nowadays want home offices, unless you need one for yourself, don’t break down walls to convert existing bedrooms. Bedrooms are far more versatile, as they can be used as offices without any structural renovations, or used for their intended purpose. A home with 3 bedrooms and no office is worth more than a home with 2 bedrooms and an office.

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New Hardwood a Key Upgrade Before Selling

Wood floors are in high demand and significantly increase the value of your home. Unless buyers are specifically looking for the softness of carpeted flooring, even false wood is more appealing than carpet. Of course, hardwood is always going to bring the highest increase in value. Because of this, you may think that if you already have hardwood floors, you don’t need to change anything. But you should still consider replacing it, since new hardwood is even a significant improvement over old hardwood.

It’s fairly simple for buyers to tell if your flooring is old. Hardwood gets scratched and its color dulls. Heavy use and oversanding are easy to spot. Some of these issues can be fixed by simply refinishing it, but if the damage is more than simple wear and tear, such as nails sticking out or boards coming apart, you absolutely want to replace it. Your buyer is going to anyway, so you may as well get more value for your home while improving buyer interest. Even more importantly, old flooring can pose structural issues. This can be spotted anywhere the floor seems to move too much when walking on it.

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Staging Tips for Bedrooms

You may already be aware of the value of staging your home to attract buyers. Just knowing that you should consider it doesn’t actually tell you how to accomplish that, though. It’s important to note that people spend a lot of time in their bedroom, even when they aren’t sleeping. It’s a place for a multitude of forms of relaxation. So, you want it to look relaxing. If you’re having trouble making your bedrooms look appealing to buyers, maybe these tips will help.

Be careful not to make the place look too much like you, specifically, live there. While staging does involve decorations of some sort, otherwise the place will simply look bland, the decor needs to be somewhat more generic. This allows buyers to imagine themselves living there. On a related note, you should choose neutral colors. You don’t know what colors the buyers will like. They may repaint anyway, but you don’t want to turn them off from even trying. White bed coverings and curtains are best, as they amplify lighting. The position of the furniture is also important. As one would expect, the bed is generally the focal point of a bedroom. It should be situated such that it provides a sense of balance. If possible, put it across from windows or doors. Try to make sure there is space to move around the bed. If none of this is possible, at least place the bed against the room’s longest wall.

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Is a Pool Worth the Investment?

You’re likely aware that having a pool will probably increase the value of your property. But if that’s your only reason to get one, you may want to rethink your plans. It may or may not be a good idea, depending on the circumstances. Of course, if you want a pool anyway for your own use, you may be less inclined to care about the numbers. However, regardless of why you want a pool, there are several factors to consider.

A pool is expensive. It’s not like some small upgrades that can have a major impact over time for a low cost. Unlike energy upgrades, pools don’t generate more value as time goes on; their value changes only with buyer demand. In fact, a pool will actually cost you more money over time, in addition to the large up-front cost. Cleaning and filtering costs add up over time, and having a pool increases your insurance costs. If your plans don’t include using the pool, it may not be a good return on investment. In addition, depending on the area, you may not actually want to increase your home value. Pools are ultimately a luxury feature. If you live in a low-cost area, it’s unlikely that prospective buyers searching in that area have large amounts of money to spend. Conversely, if you live in a high-cost area but don’t have a pool, adding one could help bring your home some more appeal.

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How to Optimize Your Closet Space

In order to figure out how best to organize your closet, there are two major questions that need to be answered: What can it store, and what do you want to store? The first question may seem obvious, but many people don’t actually properly measure their closet. You’ll want to know exact dimensions and also account for storage aids such as rods, dividers, and shelving. Figure out how to get the most out limited space. You can even hang hangers on other hangers, if you need to.

The second question is rarely considered at all. Any leftover space is generally occupied by anything that can be shoved in there with the clothes. This isn’t optimal, and you should really plan ahead what exactly you want to go in your closet. For example, snow clothes probably don’t need to be there. You’ll only wear them in winter, so you don’t need easy access to them most of the year. Think about what you use each item for, and group the items by function. Also, clothing doesn’t even have to be what it’s used for at all. Maybe all or most of your clothing can be put in a dresser, leaving room in the closet for things like sheets or towels.

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Combat Low Inventory With a Home Renovation Loan

With the current market’s low inventory and high prices, buyers are struggling to find entry-level or starter homes. There is one type of home they can afford to buy, though: fixers. These also aren’t in high demand, so competition isn’t as fierce. The problem is, first-time homebuyers typically don’t want to spend extra or can’t afford the additional cost of fixing up their homes. But that can be resolved with home renovation loans.

Two common home renovation loans are the FHA 203k loan and the Fannie Mae HomeStyle loan. Both require a minimum credit score of 620 and a minimum down payment of 3%. They cover most home improvements, including both structural and cosmetic. However, keep in mind that the FHA 203k loan can only be used for primary residences, while the HomeStyle loan can be used for both primary residences and investment property.

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Tips For Home Sustainability Upgrades

An increasing number of people are seeking ways to contribute to the environment. While a single person isn’t going to suddenly solve the climate crisis, every little bit can help. Planting gardens improves air quality and also gives you access to fresh fruits, vegetables, or herbs, while also slightly improving your energy efficiency. Some other energy efficiency upgrades can also significantly reduce your annual costs.

Everyone knows about solar panels, and you may even have already upgraded to solar energy. But there are other solar energy upgrades you may not be aware of. There are solar attic fans and solar water heaters as well. If you haven’t upgraded to LED lighting yet, you definitely should. LEDs are massively more energy efficient than regular lightbulbs, which translates to much lower utility bills. They also last longer, so you won’t need to spend money on replacements as often. Even windows have gotten energy efficiency upgrades. Energy efficient windows combined with good insulation reduces the workload of heating and cooling units.

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Pros and Cons of Open Concept Living

The idea of open concept living used to be pretty hot, but it’s started to cool down recently. Shifting trends in usage have made open concepts less useful to most families. That doesn’t mean the advantages have disappeared; they’re just not in high demand right now. This is mainly a result of COVID-19, which has made the advantages less appealing and the disadvantages more salient. Ultimately, though, it’s a personal choice.

But what are these pros and cons? The biggest con is noise. Open concept floorplans have fewer walls and doors to muffle sounds from other rooms. With more people transitioning to work-from-home, the added noise is distracting people from their work. In addition, having lots of empty space is just not a priority for most people. Yes, people want larger homes, but that’s to accommodate more usable space, not empty space. The biggest benefit of open concept living, and the reason it rose to popularity, is that the wide open spaces with good natural light allow for excellent entertainment spaces. However, the pandemic had drastically reduced the appeal of hosting indoor events. What it does still accomplish is creating a feeling of togetherness, even when family members are in different rooms.

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