Breezy Real Estate BLOG

Breezy Real Estate

What You Need to Know About Home Equity

10/23/2024

226

Hey there, homeowners and future homeowners! Today, we're diving into a topic that's both intriguing and immensely valuable: home equity. You might have heard the term tossed around in financial discussions or seen it in glossy real estate brochures, but what exactly is home equity? More importantly, how can it benefit you? Grab a cup of coffee, and let’s break it down together.What is Home Equity?Think of your home as a treasure chest. Inside, along with the comfort and memories, lies a hidden gem called equity. Home equity is the portion of your home that you truly own, free and clear of any mortgage debt. It's calculated by taking the current market value of your home and subtracting the remaining balance on your mortgage. For example, if your home is worth $400,000 and you still owe $150,000 on your mortgage, your home equity would be $250,000. The Magic of Building Home EquityBuilding equity in a home is a good thing because it grows over time, and it's one of the most significant benefits of homeownership. Here’s how it happens:1. Paying Down Your MortgageEvery mortgage payment you make reduces your loan balance, which in turn increases your equity. Think of it as a slow but steady march toward full ownership.2. Property Value AppreciationReal estate tends to appreciate over time, meaning your home’s value may increase. This appreciation can significantly boost your equity without you having to lift a finger.3. Home ImprovementsUpgrading your home can also increase its market value. A modern kitchen, a new roof, or an additional bathroom can make your home more valuable, adding to your equity.Unlocking the Benefits of Home EquitySo, what’s in it for you? Let’s explore some of the top benefits of having home equity.1. A Safety Net for Financial EmergenciesLife is unpredictable. Having substantial home equity provides a financial cushion for unexpected expenses. You can tap into this equity through a home equity loan or line of credit (HELOC) to cover medical bills, car repairs, or other emergencies. 2. Funding Major ExpensesPlanning a child’s college education? Dreaming of starting a business? Need to renovate your home? Your home equity can be a valuable resource for funding these significant expenses, often at a lower interest rate compared to other types of loans. 3. Debt ConsolidationIf you’re juggling high-interest debts, using home equity to consolidate them can be a smart move. By taking out a home equity loan to pay off credit cards or other loans, you can potentially lower your interest rates and simplify your finances with a single monthly payment.4. Retirement PlanningFor many, their home is their biggest asset. As you approach retirement, you can tap into your home equity to supplement your income. Options like a reverse mortgage allow you to convert your home’s equity into cash without selling the house.5. Increased Borrowing PowerWhen you have significant equity, lenders see you as a lower risk, which can make it easier to qualify for loans and secure favorable terms. The Path to Building EquityNow that we’ve covered the benefits, you might be wondering how to build your home equity faster. Here are some tips:1. Make Extra Mortgage PaymentsEven small additional payments toward your principal can accelerate your equity growth. Consider putting bonuses, tax refunds, or other windfalls toward your mortgage.2. Opt for a Shorter Loan TermIf you can afford higher monthly payments, a 15-year mortgage instead of a 30-year loan can help you build equity much quicker.3. Maintain Your HomeRegular maintenance and timely repairs keep your home in good condition, preserving its value and, consequently, your equity.Final Thoughts Home equity is more than just a number on a financial statement; it's a powerful tool that can help you achieve your financial goals and secure your future. Whether you're planning for emergencies, investing in big dreams, or paving the way for a comfortable retirement, understanding and utilizing your home equity can make all the difference. So, there you have it! Home equity in a nutshell. It's your secret weapon in the world of personal finance. Keep building it, manage it wisely, and watch as it transforms into one of your most valuable assets. Happy homeowning!

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Buying

Don't Let Renting Cost You: Surprising Ways Renters Lose Money

05/15/2024

As a renter in Raleigh, NC, you're probably all too familiar with the feeling of watching a significant chunk of your paycheck disappear each month, only to have nothing to show for it at the end of your lease term. While renting offers convenience and flexibility, it can also be a money pit that prevents you from building real wealth and equity. In this article, we'll explore some surprising ways renters lose money. Recurring Rent Increases One of the most obvious ways renters lose money is through rent increases. Landlords regularly raise rents to keep up with market rates and inflation, leaving you with the choice of either paying more or moving – which often comes with additional costs. Over time, these rent hikes can add up to thousands of dollars that could have gone towards a mortgage payment and building equity in your own home.Lack of Tax Benefits As a renter, you miss out on valuable tax benefits that homeowners enjoy, such as deductions for mortgage interest and property taxes. These tax breaks can save homeowners a significant amount of money each year, effectively reducing the overall cost of homeownership. Maintenance and Repair CostsEven if your landlord covers major repairs, you may still be responsible for smaller maintenance costs or damage caused by normal wear and tear. From unclogging drains to replacing lightbulbs, these expenses can quickly add up over the course of a lease term. When you own a home, you have the freedom to make improvements and repairs at your own pace, potentially increasing your property's value in the process.Limited Control Over Living Conditions As a renter, you have limited control over your living conditions. You may have to deal with noisy neighbors, outdated appliances, or a lack of personal touches that make a space feel like home. These inconveniences can detract from your overall quality of life and sense of security. The Breezy Raleigh Advantage: Building Wealth and Stability: If you're tired of throwing away money on rent and want to start building equity and wealth, it's time to consider purchasing a home in Raleigh. That's where Breezy Raleigh comes in – a team of experienced real estate professionals dedicated to helping renters like you transition seamlessly into homeownership. Unlike the typical real estate experience, Breezy Raleigh takes a personalized approach, getting to know your unique needs, preferences, and financial situation. Our expert agents will guide you through the entire home buying process, from preapproval to closing, ensuring that you find the perfect home within your budget.But the benefits of working with Breezy Raleigh go beyond just finding a house – we can help you secure competitive mortgage rates, navigate the complex world of real estate contracts, and even connect you with reputable home inspectors and contractors for any repairs or renovations needed. A Firsthand Experience: From Renter to HomeownerDon't just take our word for it – hear from a former Raleigh renter who made the leap to homeownership with the help of Breezy Raeigh: "My wife and I had been renting in Raleigh for years, and it felt like we were just throwing money away each month," says Daniel P. "We were hesitant to buy because we didn't know where to start, but Breezy Raleigh made the process so much easier than we expected." "Our agent, Sam, really took the time to understand our goals and budget. She never pressured us and was always available to answer our questions. When we finally found our dream home, Breezy Raleigh negotiation skills helped us secure a great deal." Daniel and his wife have been homeowners for two years now, and they couldn't be happier with their decision. "Owning a home has given us a sense of stability and pride that we never had as renters. And knowing that our mortgage payments are building equity, rather than just going towards someone else's pocket, is incredibly satisfying." What You Can DoIf you're a renter in Raleigh who's tired of losing money and wants to start building wealth through homeownership, it's time to partner with Breezy Raleigh. Our expertise, personalized service, and commitment to your best interests can help make the home buying process a breeze. Contact us today or talk to a local realtor to take the first step towards turning your rent payments into a valuable investment.

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Investing

How to Save for a House Down Payment

01/15/2024

101

Are you thinking of saving to buy a house?A house down payment is a necessary first step in owning a home. But saving for a house in the Raleigh, NC area can be difficult, especially for first time buyers. Fortunately, there are several ways you can get started. One of the most obvious is to pay less rent. By reducing your monthly expenses, you will be able to put more money towards a down payment. Another way to save for a house is to make a budget. A budget helps you track your spending and shows you where your money is going. This will be important if you want to know where to direct your savings. Ideally, you'll want to allocate money to various categories including fixed expenses, nonessential expenses, and unexpected costs.The best way to make a budget is to start by looking at your current financial situation. You should be able to figure out your gross monthly income and all of your regular expenses. Once you have this information, you can make a reasonable estimate of how much you'll need to save to buy your dream house. There are several other things to consider when making a budget. For example, you may want to consider getting a roommate. A roommate is one of the most convenient ways to save for a house. However, finding a roommate isn't always easy. Alternatively, you may consider renting a smaller apartment in a cheaper neighborhood.If you have a lot of debt, this could be a hindrance in your quest to save for a house. Consolidating your debts can help you cut down on multiple payments and interest rates. Similarly, if you have a car that isn't being paid off, selling it can help you shave off a few bucks.The simplest and most obvious way to save for a house is to cut back on your nonessential expenses. This can include items such as eating out, ordering imported products, or online shopping. These costs add up and aren't essential. Taking the time to eliminate these costs can be a huge help when it comes to saving for a house. There are also many other ways to save for a house. Consider moving to a less expensive area, downsizing, and taking advantage of government home-buying strategies. In addition, you can try and find a better job or start a side business to boost your income. Probably the most useful tip when it comes to saving for a house is to plan ahead. By preparing for predictable expenses, you'll be able to take advantage of the most obvious saving methods.To do this, make an audit of your spending over a specific period. This can be a simple monthly or quarterly affair. Use an app like Mint or Spending Tracker to keep track of your expenditure. Seeing where your money goes will give you an idea of whether you're splurging or saving wisely. The other big thing to do is to cut out the fads and impulsive spending. Some people like to go out for a fancy lunch or a relaxing afternoon at the spa every now and then. But if you're trying to save for a house, these aren't the best reasons to dine out. In conclusion, the best way to save for a house down payment is through disciplined saving and smart budgeting. First, determine how much you need to save by researching the average cost of homes in your desired area. Then, create a monthly savings plan that allows you to gradually accumulate the necessary funds over a set period of time. It may be helpful to open a separate savings account specifically for this purpose, so you're not tempted to dip into these funds for other expenses. Establishing a budget and limiting spending will help you to make progress towards your goal. Automating regular payments into a dedicated savings account will ensure you stay focused and put money away each month. Additionally, seeking advice from professionals such as mortgage brokers or financial advisors can help clarify the process and ensure you are making sound decisions along the way. In addition to regular saving, consider other ways to increase your income or reduce expenses. This could include taking on a side job, selling unused items, or cutting back on non-essential spending. You might also look into first-time homebuyer programs or grants that can help supplement your down payment savings. Lastly, investing wisely can also contribute towards your goal if done correctly and with proper guidance. Remember that patience is key when saving for a big purchase like a house. It might take longer than expected but staying focused on the end goal will help make the process more manageable.

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Holiday

11/09/2022

When it comes to buying a home, the last thing any buyer wants to find out is that there is a serious encroachment issue. In other words, property line issues. Unfortunately, this is a reality for many buyers, as encroachment issues are not always caught during the home inspection process. An encroachment issue can delay the closing of a home by weeks, or even months, and in some cases, the issue may be enough to cause the sale to fall through entirely. An encroachment is when one property owner builds extending onto another property. The line where one property ends an or unauthorized intrusion onto their real property the other begins is called the property line. Encroachment in real estate usually refers to when this occurs without the permission of the other property owner, and it is considered to be intentional. Structural encroachment happens when a physical structure from one property crosses over onto another property. This can happen with fences, buildings, or other features. Even if the encroachment is not structural, it may still be considered illegal. What Types of Encroachments Are There? There are several types of encroachment. Structural encroachment occurs when a building or other structure is built on or over the property line. Property encroachment occurs when someone uses part of your property without your permission. This could be something as minor as putting a flowerpot on your property line or something as major as building a deck that extends onto your neighbor's property. Potential encroachment occurs when there is a possibility that someone could encroach on your property in the future, such as if your neighbor plans to build a shed that would extend onto your property. Encroachments can take many different forms and can often be difficult to spot. Here are a few examples of encroachments: 1. An unapproved fence or structure that extends onto your property. 2. A neighbor's trees or shrubs that are growing onto your land. 3. Someone parking their car on your property without permission. 4. A utility company placing equipment on your land without authorization. How Do You Determine a Major Encroachment from a Minor Encroachment?The main difference between a major and minor encroachment is the size and scope of the project. A major encroachment is usually a much larger project that has a greater impact on the environment, while a minor encroachment is typically smaller in scale and has less of an impact.How Do Encroachments Happen? An encroachment occurs when someone unlawfully builds on or over your property. This can happen if your neighbor builds a fence or deck that extends onto your land, or if a utility company digs trenches across your property without your permission. In some cases, an encroachment may be minor and not cause any harm. However, in other cases, it can interfere with your use and enjoyment of your property. If you believe that an encroachment has occurred on your property, you should consult with an attorney to discuss your options. What Can I Do About an Encroachment? When it comes to dealing with property lines and property boundaries, it's a good idea to have a simple conversation with your neighbor. A friendly conversation with your neighbor will most likely result in a mutually beneficial outcome. An amicable or fair agreement should be the goal. For example, if you have an encroachment on your property, you may be able to sell the land to the person who is encroaching. Or you may be able to work together on an encroachment agreement. If you are buying or selling a property, you should have a real estate attorney review the land survey records to determine if there are any encroachments. If you are buying or selling a property, you should also have a mortgage lender review the land survey to determine if there are any encroachments. What is an Encroachment Agreement?An Encroachment Agreement is a written agreement between two property owners that defines the rights and responsibilities of each party with regards to an encroachment. An encroachment is when one property owner builds or places something on their neighboring property. An adverse possession is when one property owner illegally occupies their neighboring property. An encroachment may be as simple as a fence or bushes that grow onto a neighboring property, or it may be a deck or shed that is built partially on the neighboring property. In some cases, an encroachment may be intentional, while in other cases it may be accidental. If an encroachment is not addressed, it can lead to disputes between the two property owners and can even result in legal action. An Encroachment Agreement can help prevent these disputes by clearly defining the rights and responsibilities of each party. It is important to consult with an attorney before signing an Encroachment Agreement to make sure that you understand all the terms and that the Agreement is in your best interests. Express Permission In order to avoid any potential legal issues, it is best to get express permission from the property owner before entering onto their land. There are a few different ways that you can obtain express permission from a property owner. The first is to simply ask them for permission in person. This is the most straightforward approach and gives you the opportunity to explain what you would like to do on their property. Another way to get express permission is by sending a written request to the property owner. This can be done via mail, email, or fax. Be sure to include all relevant information in your request, such as your name, contact information, and the reason for wanting to enter the property. What is the Difference Between Encroachments and Easements?An encroachment is when someone builds on or over your property without your permission. An easement is the right to utilize or occupy someone else's property for a particular purpose. As the property owner, you can have problems with either an encroachment or an easement. For example, an encroachment can block your view or access to your property, and an easement can make it difficult to sell your property or develop it. In some cases, an adverse possession claim can be made if someone has been using your property for a long time without your permission. How Can an Encroachment Identified by a Survey be Remedied? If an encroachment is identified by a survey, another property owner and the person who owns the piece of land that the encroachment is on can come to an agreement about the encroachment. This agreement is called an encroachment agreement and it outlines what will be done about the encroachment. The agreement may involve the property owner moving their property line so that the encroachment is no longer on the other person's land, or it may involve the other person giving the property owner permission to keep the encroachment where it is. Real estate encroachments can happen even if the person didn't mean to do anything to his neighbor's land. Sometimes people are unaware or not clear about the boundary line and what is actually the neighbor's land and the neighbor's rights. This can happen for many reasons such as an overgrown hedge. Encroachment usually occurs because the property survey is inaccurate or wasn't updated when the neighboring property was developed. If you discover that someone has encroached on your property, you can take steps to assert your property rights and have the encroachment removed. In conclusion, it is important to be aware of potential encroachments when buying a property. This can avoid costly legal fees and headaches down the road. If you are unsure about whether there is an encroachment on your property, it is best to consult with professional surveyors and a qualified real estate attorney.

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Home Upgrades

Tips For Winterizing Your Raleigh Home Before the Cold Weather Arrives

10/27/2022

432

Winterizing your Raleigh home is an essential undertaking, especially if you don’t like expensive repairs when it’s cold! While it's tempting to wait until it gets colder outside before you get started, this isn't a good idea. Try your best to start winterizing your home before the temperatures drop below 40 degrees.Re-Caulking WindowsOne of the easiest DIY projects to do before winter weather arrives is re-caulking windows. Take a walk around the exterior of your home and examine your windows and doors. if you find damage or insufficiently caulked areas, follow these guidelines. Make sure your window frames are clean and dry. Then, apply exterior grade caulk. Make sure to cover the entire perimeter of the window frame and the gap between the window frame and the siding.If you notice that some areas of the caulking on your windows are not waterproof, remove the old caulk with a putty knife or screwdriver. After that, apply new caulk, using a proper compound. Allow the caulk to cure for at least one day in temperatures above 45 degrees Fahrenheit and low humidity. You will also need to re-caulk the parts of your windows that move. You can use different types of protection, such as felt, open-cell foam, or even vinyl. Once the caulk has dried, you can apply weather stripping. Make Sure All Plumbing is Properly Winterized: Properly winterizing your homes plumbing is a must in order to prevent damage and prevent the need for costly repairs during the cold winter months. The plumbing system can be easily damaged when water freezes as it expands by 8-10 percent. As the water expands, it can cause burst pipes which can be very costly damage. Before winter sets in, be sure to drain water from outdoor faucets and turn off the main water valve. You should also make sure that your water pipes are adequately insulated so that they do not freeze. Keeping the temperature of your house above 55 degrees will also help prevent pipe damage. If you have a home that is unoccupied, you may want to drain the underground supply line or irrigation system to prevent water damage. Another way to prevent plumbing problems is to get an air compressor and blow out any water that has accumulated in your pipes. You can do this yourself or call a plumber for assistance. Either way, you should seek professional help if you aren't sure how to go about it. Besides draining the water supply, you should also make sure your plumbing is adequately winterized. Freezing water expands and creates pressure inside pipes. This pressure can damage pipes and make them inoperable. As a result, winterizing your homes plumbing is essential. Making sure all of your home's plumbing is properly winterized is an important step to take before the consistently cold weather sets into our area. Here are some vital plumbing tips to help you get your house ready for winter: 1. Inspect all of your home's plumbing fixtures and pipes, both inside and outside, for any signs of leaks or damage. 2. If you have any exposed pipes, insulate them with foam pipe insulation or wrap them with electrical tape to help prevent them from freezing.3. Drain all outdoor faucets and hose bibs. Store them indoors for the winter to prevent freezing and bursting. Follow basic plumbing procedures for winterizing outdoor spigots.4. If you have a sprinkler system, have it professionally winterized by a qualified technician to avoid any issues. Investing in a Furnace or Heat Pump Investing in a new furnace can be a great way to save money on energy costs but not always necessary. A furnace that's more energy efficient can save you up to 50% on your heating bills which is really something to consider. Not only that, but you may be able to save even more on your heating bills if you replace an older furnace with a high-efficiency model. At a minimum, make sure you change the furnace filters. A furnace that will run efficiently can save you money in the long run, and a furnace with a programmable thermostat can give your system years of service. And the best part is that you may still be able to get a tax credit that covers up to 30% of the cost of a new furnace. (Check with your accountant.) Heating systems include heat pumps. Heat pumps are a type of heating system that is very common in new homes and especially in the Raleigh NC area. Although they are designed to be durable and efficient, there are still some steps that need to be taken to ensure that they continue to operate properly during the winter months. It would be best to contact your local air expert to have them examine your heat pump unit and go through their list of preventative measures. Invest in Weather Stripping Investing in weather stripping for your windows can help keep your home warm in the winter. The best time to winterize your house is before the cold weather begins. Weather stripping prevents drafts from entering your home by sealing gaps and cracks around windows and doors. When installed correctly, weather stripping can prevent the entry of cold air and save you a significant amount of money.You can also use window insulation kits and foam for doors and windows. These are both inexpensive and easy to install. In addition to sealing off drafts, they also keep melted snow and bugs out. Window insulation films and thick curtains can also help keep out cold air. Caulking DoorsCaulking around doors can help you keep your home warmer during the winter months by sealing air leaks. According to the U.S. Department of Energy, up to 30% of a home's energy use can escape through doors that are not properly sealed. There are several inexpensive products that you can use to seal air leaks. While some older homes will require professional installation, DIY winterizing is an easy way to make your home is more energy efficient.Caulk is a sealant that fills in imperfections in the surface of a door or window. It also keeps out cold air and moisture. Before you begin applying caulk, you should clean and remove any old caulk from doors and windows. You should then use a primer to ensure a good adhesion surface for the caulk.Investing in Window Inserts or New WindowsIf you are winterizing your home, investing in some "indow" window inserts is a solution that could work for you. New windows should have low air leakage ratings, which reduces energy bills and greenhouse gas emissions. Additionally, windows rated as energy-star are more energy-efficient and will reduce household energy costs by up to 12%. But if you have older windows and don’t have the means to buy new ones, consider indow window inserts to reduce cold drafts and noise too. One of the most common reasons for winterizing your Raleigh home is to keep it warm and keep utility bills down. This process works by preventing cold air entry into your home and retaining the warm air. This helps prevent your home from using excessive energy to offset the cold air. The most common places for cold air entry are windows, doorways, and floors. You can also take measures to prevent air from entering through malfunctioning windows or natural air leaks. In summary, it is clear that there are many reasons to winterize your Raleigh, NC home. By taking the time to do so, you can save money on your energy bills, reduce the risk of damage to your home, and make your home more comfortable during the cold weather months. With so many benefits, there is no reason not to take steps to winterize your home before the seasons change and cold temperatures are here! Thank you for reading this article.

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First-time Homeowners

What is Home Equity and Ways to Build It

10/24/2022

376

In today's economy, having home equity is becoming more and more important. Not only is it a valuable asset, but it can also provide many benefits.What is Home Equity?Generally speaking, home equity is the value of your home minus any outstanding mortgages, loans, and other debts on the property. How Do You Build Home Equity?There are a few ways to build home equity. The most common is to increase your home's value by making repairs, upgrades, or additions. You can also sell your home and use the proceeds to pay down debt or invest in other properties.Here are Some Tips to Help You Build Home Equity:1. Make sure your expenses are manageable. Don't overspend on unnecessary items. Instead, try to stick to a budget and save up the extra money each month. This will help to increase your home equity over time.2. Pay off your debt as quickly as possible. This will not only decrease your monthly payments, but it will also increase the value of your home Equity.3. Make smart investment choices. Don't spend all of your cash on one purchase – invest in stocks, bonds, and other mutual funds to grow your wealth over time.4. Don't forget about the value of your home when shopping for a new home or refinancing your current one. Talk to a qualified real estate agent about what's available in your area and how much equity you could potentially borrow against it. Why Home Equity is Important?There are several reasons why home equity is important. For one, it can act as a cushion in tough economic times. If you lose your job or experience other financial difficulties, you may be able to tap into your home equity to help make ends meet. Additionally, having home equity can make it easier to qualify for a loan or line of credit. And finally, if you ever decide to sell your home, the equity can provide a nice nest egg.What Are the Benefits of Building Home Equity? There are many benefits to having home equity, including: • More money for expenses: If you have enough home equity, you can use that money to cover unexpected costs or emergencies. This can save you money in the short term and help you stay financially secure in the long term. • More stability: Having a large amount of equity in your home gives you more stability and security during tough times. If something happens that jeopardizes your mortgage or other debts, having a large chunk of equity in your home may help protect you from foreclosure or bankruptcy. • Increased buying power: Having more money available to buy things you want can make a big difference in your lifestyle. For example, if you have enough equity in your home to purchase a nicer car or invest in stocks, you'll have more latitude when it comes to spending choices and overall financial stability. • Lower borrowing costs: Having plenty of equity means that you'll likely pay lower interest rates on loans and mortgages than someone who doesn't have as much invested in their homes. This can save you tens of thousands of dollars over the life of a loan, which can be significant if you're paying high interest rates on debt already. Can Home Equity Decrease? It is possible for home equity to decrease. This can happen if the value of your home decreases or if you take on new debts that exceed the value of your home equity. However, there are also ways to increase your home equity, such as by making improvements to your home or paying down your debts. Ultimately, whether your home equity increases or decreases will depend on a variety of factors.Does Home Equity Count Towards Net Worth? Home equity does count towards net worth. Net worth is the total value of your assets minus your liabilities. So, if you have a home with a value of $200,000 and a mortgage of $100,000, your home equity would be $100,000. This would be included in your net worth calculation.Does Home Equity Loan Require Appraisal? When taking out a home equity loan, an appraisal may be required in order to determine the value of your home. This appraisal will help to determine how much money you can borrow against your home equity. In some cases, the appraised value of your home may be less than the amount you owe on your mortgage. In this case, you may still be able to get a home equity loan, but the amount you can borrow will be limited. Is There a Limit to How Much Home Equity I Can Have?There is no limit to how much home equity you can have. However, the amount of home equity you have will be based on the value of your home and the amount of your mortgage. If your home value increases or if you pay down your mortgage over time, your home equity will also increase. Can Home Equity be Used as a Down Payment? Yes, home equity can be used as a down payment on a new home. If you have equity in your current home, you can use it as a down payment on your new home. This can help you to avoid having to take out a loan for the down payment, and it can also help you to get a lower interest rate on your mortgage. Home equity can also be used as a down payment on other major purchases, such as a car or a boat. When to Use Home Equity? There are many benefits to building home equity. Equity can increase your wealth, provide financial security, and make it easier to sell your home in the future. Equity can be used as a safety net in case of job loss or unexpected expenses. It can also be used to pay off debt, buy a new home, or make other investments.Does Home Equity Loan Affect Credit Score?The answer to this question is a bit complicated. Home equity loans can affect your credit score in a few different ways.First, when you take out a home equity loan, you're essentially taking on more debt. This can cause your credit score to go down.Second, if you use the money from your home equity loan to pay off other debts, like credit cards, it can help your credit score by reducing your overall debt burden. Third, if you make timely payments on your home equity loan, it will help improve your credit score. So, in short, a home equity loan can affect your credit score both positively and negatively. It all depends on how you use the loan and whether or not you make your payments on time. Conclusion:Building equity takes time and patience, but it is a valuable asset that can provide many benefits. If you're interested in increasing your home equity value, there are a few ways to do it. Keep these tips in mind:-Set goals and targets for yourself - Don't aim to build equity overnight. Make gradual progress towards your objectives and allow yourself time to achieve them.-Be disciplined - One of the biggest factors affecting your success when building equity is discipline. If you don't stick to your plan, it will be more difficult to reach your goals.So, whether you're looking to build up your wealth, cover some living costs, or prepare for a future sale, home equity is an important asset to have. There are lots of ways to build home equity, and the options are endless. I hope this article has helped you understand more about home equity and how you can use it to build your wealth. There's nothing like having a bit of extra cash in your pocket to make your life a little easier!*As always, this information is of general nature and not intended to replace or represent advice from a professional who specializes in the area of interest and has consulted with your personal situation. Please consult your financial advisor.

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Relocation

The Value of Home Ownership

09/19/2022

359

The value of home ownership is often overlooked, and yet a recent white paper by the National Association of REALTORS examines the social and financial benefits of home ownership. According to the study, eighty percent of adults believe that buying a home is the best long-term investment. Not only does home ownership create wealth, but it also improves quality of life, reduces stress, and increases self-esteem.Home ownership has a long history in the United States. It has helped build the middle class and fostered the post-war economic boom. In the United States, home ownership has long been an important equalizer and a source of wealth. It provides an avenue for middle-class families to build wealth, and houses have typically appreciated at rates that are much higher than inflation. For low and middle-income families, housing is often the single largest source of wealth, as many of them don't invest in stocks or other financial investments. Today, home equity makes up roughly 42 percent of the wealth of the average middle-class family.Homeownership also benefits communities. Homeowners support their local schools, fire and police departments, and city governments. Owning a home also means being a part of the neighborhood. You should fight to protect the value of your property. In America, the desire to own a home will never go away. It is a part of the American dream, and it makes economic, social, and practical sense. It is also essential to our nation's economy. Therefore, government policy cannot abandon its role in housing-credit markets. However, the housing bubble of the early 2000’s blew because of reckless lending. The Power of Home Equity Home equity is the difference between a home's appraised value and its mortgage balance. Home equity can influence many financial decisions, including whether or not you need private mortgage insurance. Home equity is also a long-term strategy for building wealth. There are several different ways to calculate your home's equity. Using a home equity calculator will give you a general idea of the equity in your home. An appraisal will provide more accurate numbers. A home's price is influenced by its location. In some areas, homes appreciate, while others depreciate. The value of land beneath a rundown home might be worth more than the residence. If this is the case, a seller might consider selling the home as-is or demolish it entirely to sell the land underneath it.Increasing home prices have contributed to the significant rise in home equity for homeowners. According to CoreLogic data, the equity in US homes has risen by over $2 trillion since the second quarter of 2020. Rising home prices have led many homeowners to look for ways to unlock the equity in their homes. While some homeowners may opt to sell their homes, others can take advantage of financial products such as cash-out refinancing or a home equity line of credit. A reverse mortgage is another option, which is available to most homeowners. Quality of Life and Home Ownership In addition to its financial benefits, home ownership also improves quality of life. Homeowners often volunteer and become involved in their local community. Many homeowners also work hard to maintain their properties to keep them looking good. This helps them build a sense of responsibility in the community. In contrast, the majority of renters rarely stay in one place long enough to develop roots. Homeownership StatisticsAccording to the Census Bureau data, the homeownership rate in the United States rose to 65.8% in 2020, from 65.1% in 2019. The long-term trend is still positive, however, as the homeownership rate was just 62.9% in 2016 and is up from a 50-year low of 62.1% in 2011.The first step in homeownership is the decision to buy a home. A home represents one of the most significant investments in a person's life. Many Americans become homeowners before age 35 and continue to own a home for the rest of their lives. The oldest group of homeowners is those who are 65 years or older. The median age of a first-time homebuyer was 33 years old in 2016, while the median age of repeat homebuyers was 56 years old in 2021. In addition, 11% of homebuyers purchased a multi-generational home, which included two or more generations. Benefits to Owning Your Own Home Owning your home is an incredible asset that can save you money and increase in value over time. It can also serve as a nest egg for the future. You won't have to worry about paying rent every month, and if you decide to move, you can sell it for a profit. Another advantage to owning your own home is that you can make changes whenever you like. You won't have to worry about being locked into a lease agreement and having to change things you're not fond of. You can also make improvements and additions that are both budget-friendly and attractive to you. The most important tax benefit of owning your own home is the ability to deduct the interest you pay on your mortgage. You can deduct your interest payments for several years, which can help you pay less taxes. But you should be aware that there are limits, qualifications, and other requirements for getting these tax deductions. These depend on the type of property you own and its location. You can also design your home the way you want it, which will allow you to enjoy the many benefits of owning your own home. For example, you can adopt a pet, paint your walls a different color, or make renovations to your kitchen. In addition, you will be able to make changes to your home without having to worry about getting permission from your landlord. As we mentioned earlier, you can leverage the equity in your home to make additional purchases. You can refinance your mortgage or take out a home equity loan to use the funds. This can help you renovate your home, purchase a new car, or treat yourself to a special holiday. In addition to these benefits, you are also able to borrow against the equity in your home. Another advantage of owning your own home is that your mortgage payments will remain stable. This is not the case with renting. Your rent is subject to fluctuations and will increase and decrease over time. You will also need to pay a utility bill every month. The cost of moving into a home can initially deplete your savings. However, the benefits of owning your own home outweigh the costs. Besides saving on rent, owning your own home will also help you avoid dealing with bad landlords. In the case of renting, you may be stuck with a landlord who demands too much rent, is rude, or exploitative. In addition, owning your own home will allow you to choose where you want to live. How Homeownership Can Help You Protect Your Financial Stability Homeownership can help protect your financial stability if it allows you to avoid large debt payments and other high-risk investments. By Having an ownership stake in your home, you can take more precautions to protect yourself from potential creditors and loss of income. Additionally, owning a home gives you the security that comes with knowing that you will be able to meet monthly payments on the property without fear of bankruptcy or foreclosure. In conclusion, home ownership is a valuable asset for many reasons. It provides security, stability, and builds equity over time. It also offers tax benefits and can be a source of income if you choose to rent it out. If you're considering buying a home, be sure to do your research and consult with a financial advisor and realtor to ensure it's the right decision for you.