5 Tips for Deciding on a Home Improvement Project

Home improvements can greatly add to your home’s value.

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Making a new addition to your home is a great idea for various reasons, but interest rates and property values can change the effectiveness of your investment. If you’re considering building a new addition into your home, consider the following five pieces of information as you make your decision:

1. Cost. When budgeting for your addition, plan for the costs associated with major home improvement projects. The hefty cost is something homeowners should consider closely before embarking on this type of construction. It’s also important to consider the additional costs of utilities and taxes to affect your annual budget.

2. Investment value. Sellers don’t necessarily recoup their entire investment due to variables associated with property values.

3. Enjoyment factor. Cost and investment aren’t always the main concerns of homeowners when they’re making additions. Sometimes they just want to enjoy the added space or have a need to expand their home.

4. Stress. I don’t have to tell you that stress is a con, and can be a temporary problem. Selling your home and buying a new one may prove no less stressful.

5. Design aesthetic. A poor design decision can detract from the appearance of your home. An addition that’s mismatched to the main structure can detract from the home’s visual appearance. This will turn buyers off.

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Consider all the pros and cons
 before making a decision.

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Consider all the pros and cons when it comes to making a decision about a new home addition. Talking to other homeowners can also help you gather advice and enhance your decision making process. If you have any questions for us or if you know someone looking to buy or sell, give us a call or send us an email. We look forward to hearing from you.

How Owning a Home Increases Your Wealth

How can you grow your wealth through homeownership? I’ll go over four different options for you today.

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One of the major benefits of owning a home is getting to build your wealth. How can you grow your wealth using your home? There are a few different ways:

1. Long-term homeownership builds wealth. When you use a mortgage to buy your home, the longer you own the home, the more of that mortgage you pay off. When you first start paying a mortgage, you are primarily paying interest. Over time, however, you start to pay off more principal, and as the principal adds up, you have more long-term wealth in your property.

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By paying off your mortgage,
you build long-term wealth.

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2. Homeownership lets you claim certain tax deductions which are not available to renters. You can write off your property taxes and the interest that you pay off each month.

3. You can take out a home equity line of credit. You can use that line of credit to refinance your car or student loans or even to make improvements to your home, like adding a new kitchen. You are also allowed to write off the interest from your home equity line of credit.

4. You can take advantage of capital gains. If you are a single person and you have lived in the home as a primary resident for at least two years, then you can make up to $250,000 on your home sale without paying any taxes.  If you are married, that number doubles and you can make $500,000 on your home sale.

There are many financial benefits to homeownership. If you have any questions about buying a home or about our local real estate market, give me a call or send me an email. I would be happy to help you!

Recent Interest Rate Increases Will Affect Everyone

The recent interest rate hike impacts everyone in the real estate market. Here’s how.

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What does the increase in interest rates mean for you?

The Federal Reserve’s interest rate setting committee on Wednesday said that it would raise interest rates by a quarter of a percentage point to between 0.50% and 0.75%. It is only the second time the U.S. central bank has raised interest rates since 2006 when the economy was yet to be hit by the financial crisis.

So what does this mean for the real estate market?

First, if you’re going to buy a home, chances are that you will opt for a 30-year, fixed-rate mortgage like most home buyers do. Those loans have become remarkably affordable, especially since the financial crisis, with their interest rates bottoming out at around 3.5%.

In general, movement of the Fed’s rate does not have a large, direct impact on long-term mortgage rates. But when the Fed’s rate goes up, banks find ways to pass their higher borrowing costs along to consumers.

Because long-term mortgage rates are set in stone, they also factor in the anticipation of future rate increases. That’s part of why mortgage rates have shot up in recent months—the Fed has suggested that interest rates will likely continue rising for years.

As mortgage rates go up, people are a little less likely to buy a house, and those with fixed-rate mortgages are less likely to refinance because they probably will not end up with a better deal.

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Now is definitely the time to either
buy or sell your home.

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What does this all mean for you? It means now is the time to either buy or sell your home. The interest rates are still low and you will be able to lock in that rate.

If you have any more questions about why now is the best time to buy or sell a home, give me a call or send me an email. I’d be happy to help.