Smart Choice: Energy Efficient Windows
When it comes to putting together a home improvement project, choosing the right upgrades can save you time and money. Moreover, choosing the proper materials can add value to your home, something every homeowner should consider if they plan to eventually sell.
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Home Equity Tip
for the weeks of: Jan 29
What Are You Doing this Valentine?
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Weekly Tip:
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Should You Tap Your Home’s Equity To Manage Personal Debt?
Your personal debt level can be having an adverse impact on the way that you live. Credit cards, student loans, auto loans and department store debt can quickly add up — factor in interest rates of 10, 12, even 20 percent or more and the burden on consumers can be tremendous. If you are a homeowner, a readily available way to handle your debt load can ease the burden for you. Yes, tapping the equity in your home is one way for you to consolidate debt.
Residential Debt Consolidation
The longer you live in your residence, the more likely you have built up a decent amount of equity in your home. As you pay down your mortgage and enjoy the rising value of your home, the difference between your mortgage’s pay off amount and its current value is what lenders consider to be the equity in your home.
Let me give to you an example: You bought your home just over four years ago for $185,000, taking out a mortgage loan for $165,000. At that point your equity (or piece of the pie) is $20,000. Between making fifty payments to the mortgage company and kicking in an additional $50 whenever you had it, your outstanding balance has been reduced to $152,000. What’s more, your home’s value has increased nicely, thanks to a robust housing market.
An appraisal of your house reveals that it is now worth $219,000. The difference between $219,000 and the $152,000 outstanding balance on the mortgage loan is now $67,000. That latter amount represents your home equity, a portion of the amount you can use for debt consolidation.
Home Equity Lending
Lenders will look at your home’s value ($219,000) and allow you to borrow as much as 80% of that amount ($175,200) minus the amount you owe on your mortgage ($152,000). Therefore, you could borrow as much as $23,200 ($175,000 – $152,000) to cover debt, living expenses, and even take a vacation. Of course if your debt level is much smaller than that, you may simply want to borrow enough money to pay off your debt and then allow 5-10 years to pay off your low, fixed-rate home equity loan.
Home Equity Loans — Tax Advantages
Most homeowners are able to take advantage of tax deductions for their home mortgage. However, those deductions do not extend to cover most personal debt. On the other hand, a home equity loan is usually tax deductible even if the monies were used to pay off personal debt. In other words, you can let the government reward you for paying off high interest rate credit cards and other loans by giving you an extra deduction come tax time.
Worth Your Consideration
Of course, whether it is personal debt or a home equity loan, you will have to pay off what you owe. A financial calculator can help you compare your outstanding debt with a home equity loan to help you develop a plan that is affordable, tax deductible, and much lest burdensome then the high interest rate personal debt you are presently battling.
09/10 home improvement
How to Renovate Your Kitchen on a Budget
The kitchen is the heart of the home and can go far in determining your home’s value. Given that most people don’t have the luxury of spending $50,000 or more on a complete kitchen overhaul, the following are some budget-minded renovations for today’s homeowners:
Use light colors — Lighter colors can make your kitchen seem bigger, something to consider especially if it faces north where natural light is a premium. Keep lighter colors in mind if you’re planning to put your home on the market.
Faces and handles — Replacing cabinets can cost tens of thousands of dollars. Instead, why not replace cabin faces and/or handles? New cabinet doors and updated handles can give your cabinets a “new look” without the attendant expense of a major renovation.
Let there be light — Kitchen lighting can set the mood for the room, a fairly inexpensive project especially if you are making improvements instead of wholesale changes. Better Homes & Gardens advises renovators to consider general, task, and mood lighting when making an upgrade.(2) Consider such options as fluorescent under cabinet lighting, LEDs, spotlights and more to give your kitchen a special look.
New appliances — All-new appliances can be costly, perhaps unnecessary. But, if you’re planning to make some changes Corcoran advises homeowners to look at stainless steel appliances with Miele, Viking and Subzero being the top brands. However, so-called “knock offs” from Frigidaire and Whirlpool can provide a great look for much less money.
Water sources — Move a sink and you could pay a mint to make that change. Instead, consider replacing the sink and changing out the faucet. HGTV.com notes the “…rise of modern, minimalist designs and utilitarian-chic faucets worthy of professional kitchens.” Nothing elaborate, but trendy is in.(3)
Fab flooring — If your flooring needs to be updated consider putting down stylish self adhesive tiles to give your kitchen a fresh look. Hire someone for the job and you could be looking at a pricey upgrade, so DIY!
Not every change suggested needs to be done in order to give your kitchen a fresh look. Carefully determine what project you would like to have done and move forward with gusto.
08/10 home improvement
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