Fredda Takacs' Blog
If you’re a newer homeowner, odds are you don’t really “own” your home outright. Rather, you likely have equity in your home.
In this article, we’re going to talk about what home equity is, how to use it to your advantage, and things you should avoid using your home equity toward.
What is home equity?
Unless you’re one of the lucky few who paid for their homes in cash, you probably took out a mortgage. As you pay off that mortgage you build equity.
Home equity is essentially the value of a property that a homeowner has at their disposal due to paying back part or all of their mortgage.
However, there’s another factor at play in home equity, and that’s market value.
Since the housing market fluctuates, the value of your home does as well, and as a result, your home equity changes with the market value of a house. That might sound worrying, but the good news is that due to something called appreciation.
In the same way that the cost of living tends to rise each year with inflation, so do housing prices. However, appreciation isn’t the only factor at play in the valuation of your house. As your home ages, it will likely need some renovations, which could decrease the home value.
Generally speaking, however, your equity achieves a net gain as you pay your mortgage and the value appreciates.
Now that we know why equity can be so beneficial as an asset, let’s talk about ways to build it.
The best way to build home equity is to repay your home loan. However, more than simply repaying, you’ll want to repay in the fewest number of years to avoid paying more in interest. The longer you take to pay your mortgage, the more interest accrues that could have been used toward other investments.
The second way to increase equity is one we mentioned before--market fluctuation--namely appreciation. To improve the chances of getting a high appraisal of your home, it’s important to keep up with maintenance and make smart renovation choices that will have a high return on investment.
Using home equity
The best use of home equity is to leave it be and increase its value over time. However, that isn’t always possible for all of us. Since many of us need to move before repaying our full mortgage, equity allows homebuyers to use their equity toward their next mortgage.
Another option is to take out a home equity loan or home equity line of credit. Ideally, you’ll only use these loans if you’re planning on using the loan money to increase the value of the home via home improvement projects.
Borrowing against your home equity does come with risks. Since you are putting your share of your home on the line, there is a chance of your home being foreclosed on if you don’t repay the home equity loan. However, lenders typically seek other methods of repayment or settlement before foreclosure.
As anyone up-to-speed on technology knows, social media is everywhere. And it’s a powerful tool—if used properly. You can share information in real-time and receive real-time responses and reactions. Therefore, you should be using social media to your advantage when selling your home. You’re probably wondering what social media has to do with selling a home, right? Well, let’s take a look at a couple ways where social media will not only come in handy, but might just help sell your home in real-time.
1. Post your listing
It’s very likely that your listing will be posted on many real-estate sites and even on social media. This is your opportunity to capitalize on that posting and post on your own social media channels. Consider posting to Facebook, Twitter and even Instagram. By doing this you are increasing the views that your listing will receive and increasing the likelihood that the right buyer will see your home. And all it takes is one person to love your home for it to sell.
2. Ask your friends to share
Word of mouth goes a long way. Technology’s way of word of mouth is through sharing on social media. And if you want to maximize the amount of people who will see your listing, ask your friends to share the posting—they may even add a little note to their share, which (if positive, hopefully) will only help.
3. Give them a reason to love your home
Add a personal message when sharing your listing. Tell the story of how your daughter took her first steps in the family room or how you felt the first time you walked through the front door. Giving that personal touch will bring positive feelings of your home. It will give the potential home buyer the thoughts of all the firsts that they could experience in that home.
Of course, social media will not sell your home. You should be taking the proper steps suggested by your realtor to get it in optimal shape for selling such as making small updates, decluttering, and removing overly personal items. You should also have great photos of your home for the listing. The photos will make a world of a difference when buyers are looking online. It could make or break whether they even consider your home or attend a showing.
If selling your home is timely then social media should bean important component to your selling strategy. It’s the age of technology and every generation is on social media in some respect, especially the millennial generation. And it’s important to pay attention to the millennials as more and more will begin the home buying process. It’s essential to be where they are and for most, they’re on social media.
Unmarried couples often find themselves surprised at the additional steps it takes to buy a home compared to their wedded friends.
This guide will help you prepare for buying a home together as an unmarried couple:
Banks will assess you differently than they would a married couple.
Whereas they look at a married couple as a single financial unit, you and your partner will be assessed individually. This certainly has its pro’s and con’s. Know that if one partner has a significantly lower credit score it can affect your eligibility for a loan as a couple.
Legal ownership of the title will be different.
Unmarried couples have three options when it comes to title ownership: sole ownership, joint tenants and tenants in common.
Tenants in common is the most popular. The difference between tenants in common and joint tenants is this:
In a joint tenancy ownership is 50/50. If one partner were to become deceased, ownership of their half of the property would carry over to the other partner.
Tenants in common ownership can be disproportionate to reflect each partners level of investment. If one partner were to become deceased, their living trust would inherit ownership of their portion of the property if another option is not otherwise specified in their will.
Sole ownership is just that. One partner owns full legal ownership of the property. This option can have tax benefits and increase your financing eligibility if one partner has a higher income or better credit score than the other.
It’s highly recommended for unmarried couples to sign a property, partnership or cohabitation agreement when buying a home together. This is a legal precaution to safeguard both partners in the future should anything happen.
If your finances are separate it is ideal to at the very least create a joint checking account from which to draw the down payment and mortgage installments. This is especially true if both partners are contributing to these payments. It create a clean, clearcut payment process each month.
Know each other's finances.
Discuss your credit scores, debt burden, savings, investments and financial goals. Get clear on where you each stand and how these factors will influence your buying process. Create a budget together as a couple to ensure you can take on not just the responsibility of a mortgage payment but also closing costs, homeowners insurance, property taxes and maintenance costs. Plan for savings like retirement, nest egg, family planning, future vacations, and emergency funds.
Buying a home together as an unmarried couple is a different process than that of married couples. However, that doesn’t mean it has to be harder. With an understanding of what to expect ahead of time and a plan in place, the process can be a smooth one.
Smart home devices are becoming increasingly popular among U.S. property owners. Yet deciding which smart house gadgets – if any – are right for you may prove to be difficult. Fortunately, there are several things that you can do to determine if a smart home device is a must-have, such as:
1. Consider a Smart Home Device's Purpose
A smart home device that works well for one homeowner might fail to meet the needs of another property owner. If you assess a smart home device's purpose closely, you can determine if a particular gadget matches your expectations.
For example, if you are searching for a quick, easy way to keep your home's floors dirt- and debris-free, a smart robot vacuum may be ideal. This vacuum will take the guesswork out of cleaning your house's floors. Best of all, this device will allow you to speed up the process of vacuuming your house.
On the other hand, if you are on the lookout for energy-efficient lighting, smart light bulbs could provide viable investments. These light bulbs are simple to install throughout a house. Furthermore, smart light bulbs will continue to perform for an extended period of time.
2. Evaluate Your Finances
Your budget may dictate your smart home device investments. If you analyze your finances, you can establish smart home device priorities. Then, you can gradually integrate smart home devices into your residence.
It usually is a good idea to take a slow, steady approach to smart home device purchases. If you try to do too much at once, you risk spending beyond your means to acquire and install smart home devices across your residence.
3. Shop Around
There is no shortage of state-of-the-art smart home devices available at both online and brick-and-mortar retailers. Thus, if you conduct an in-depth search for smart house gadgets, you may find quality devices that won't force you to exceed your budget.
Of course, if you shop around for smart home devices, you can differentiate between average gadgets and best-in-class ones. You also can use online tools and resources to learn about different smart home devices and select gadgets that will perform consistently.
4. Keep Things Simple
Investing in smart home devices should be a fun, exciting experience – not a stressful one. If you feel overwhelmed as you search for smart home gadgets, take a step back and review your options. This may help you alleviate your worries and re-start your search for smart house gadgets with a fresh perspective.
Lastly, it sometimes helps to collaborate with family members and friends as you shop for smart home devices. Family members and friends can help you weigh the pros and cons associated with smart house gadgets. With the support of family members and friends, you could boost the likelihood of making an informed smart home device purchase.
Take advantage of the aforementioned tips, and you could pick up a wide range of smart home devices that will help you transform your ordinary house into a spectacular residence.