Sumathi Narayanan Realty's Blog
No homeowner wants to borrow more money. However, if you’re experiencing hard financial times or looking for a way to fund a home improvement project, there are ways to borrow money with your home as collateral.
In this article, we’re going to talk about home equity loans and home equity lines of credit (HELOC). We’ll explain how they differ and break down their benefits and risks.
Before the bubble
Before the financial crisis of 2007-2008, many homeowners were borrowing readily based on the equity of their home. Interest rates were low on home equity loans, encouraging homeowners to leverage their portion of homeownership.
During the recession, however, all of that changed. People owed more money on their mortgages than their homes were worth, and banks became reluctant to lend.
In recent, years, however, house prices have been creeping back up, and banks and homeowners alike have gained confidence in the equity of their home.
As a result, a growing number of homeowners are turning back to home equity loans and lines of credit as a source of low-interest financing.
So, what exactly are these loans and credit lines?
The difference between a home equity loan and a line of credit
A home equity loan is a lump sum of money that you borrow which is secured by the value of your home. Typically, home equity loans are borrowed at a fixed rate. Lenders take into consideration the amount of equity you have in your home, your credit history, and your verifiable income.
A home equity line of credit (HELOC) is a bit different. Like a credit card, you are able to borrow money as you need it via a credit card or checks. HELOCs often have variable interest rates, which means even if you’re approved for an initial low rate it could be increased. As a result, HELOCs are better suited for borrowers who can withstand a higher leverage of risk and variation each month.
Is now a good time to borrow?
If you’re a homeowner, there’s an understandable temptation to use the equity you’ve built over the years to your advantage. In some cases, home equity loans and HELOCs can earn you better interest rates than other forms of borrowing.
However, as with other loan types, it’s important for homeowners to realize that HELOCs and home equity loans are not the same as having cash in your savings account.
Another danger that borrowers face is the potential for foreclosure if things go badly. While most lenders won’t seek foreclosure after a few missed payments, your home has been put up as collateral for repaying the loan. Most lenders will choose to sell a defaulted loan to a collections company rather than seek foreclosure.
Ultimately, the best course of action is to avoid borrowing unless it will help you out financially in the long term. However, for those with high home equity who may, for one reason or another, need to borrow, a home equity loan or line of credit might be the best choice.
If you intend to sell your house, it pays to get expert support throughout the home selling journey. In fact, if you hire a real estate agent, you can put various home selling myths to rest.
Ultimately, there are many home selling myths that you may hear before you list your house. If you take these myths to heart, you may struggle to prepare for the home selling process.
Let's take a look at three common home selling myths, and the problems associated with these myths.
1. Selling a house is a quick, seamless process.
The process of selling a house often can be long and complicated, particularly for a first-time home seller. Fortunately, if you hire a real estate agent, you can reduce the risk of encountering home selling hurdles.
A real estate agent will learn about you and your home selling goals. Then, this housing market professional will offer recommendations about how to promote your residence to the right groups of buyers and maximize your house's value.
Furthermore, a real estate agent is available to respond to questions at each stage of the home selling journey. He or she will guide you along each stage of this journey, and as such, help you identify and resolve problems before they escalate.
2. What you originally paid for your house matches what it is worth today.
The real estate market fluctuates constantly. Thus, what you initially paid for your house is unlikely to match what your residence is worth today.
A real estate agent can help you evaluate housing market data to better understand how your residence stacks up against the competition. That way, you'll be better equipped than ever before to establish a competitive price for your residence.
Also, a real estate agent may recommend that you complete a home appraisal. This appraisal will enable you to receive a property valuation to help you determine the optimal initial asking price for your home.
3. There is no need to make home improvements, because a buyer will make home upgrades after finalizing a purchase.
When it comes to selling a house, it pays to go above and beyond the call of duty. Therefore, if you complete myriad home improvements before listing your house, you can increase the likelihood that your home will stand out to potential buyers.
Take some time to examine your residence both inside and out. If you identify any major problems, you should fix these issues immediately. Because if you fail to do so, you may miss out on opportunities to stir up interest in your house.
A real estate agent generally can provide recommendations about home upgrades. This housing market professional may even be able to put you in touch with the best local contractors who can help you upgrade your residence in no time at all.
Don't fall victim to the aforementioned home selling myths. Instead, work with a real estate agent, and you can get the help you need to quickly and effortlessly navigate the home selling cycle.
Finding and purchasing a home sometimes can be difficult, particularly for an individual who encounters assorted challenges throughout the property buying journey. Lucky for you, there are several shortcuts that a homebuyer can use to streamline the property buying process. These shortcuts include:
1. Narrow Your Home Search
If you know you want to buy a home, you should consider where you want to reside and what features you want in your ideal residence. That way, you can avoid the danger of committing time and resources to analyze houses that fail to meet your expectations.
Oftentimes, it helps to craft a list of preferred cities and towns. This list will help you hone your home search to specific areas and ensure you can accelerate the homebuying journey.
Think about what you want to find in your dream house and create a list of home must-haves and wants too. With this list in hand, you can further accelerate your search for your ideal home.
2. Get Pre-Approved for a Mortgage
Some homebuyers apply for a mortgage after they find their dream residence, but doing so may prove to be problematic. Because if a buyer submits an offer to purchase a home without a mortgage at his or her disposal, this individual likely will need to move quickly to get home financing. Or, if a buyer provides a homebuying proposal but cannot secure a mortgage, this individual risks missing out on the opportunity to acquire his or her dream house.
To get pre-approved for a mortgage, you can meet with banks and credit unions and explore a wide range of mortgage options. Then, once you select a mortgage, you can kick off your home search and know exactly how much you can spend to purchase your ideal residence.
3. Hire a Real Estate Agent
A real estate agent is a homebuying expert who will guide you along the property buying journey. He or she can help you identify potential homebuying hurdles and overcome these issues before they escalate. Best of all, a real estate agent will do everything possible to ensure you can acquire a great home at a budget-friendly price.
In addition, a real estate agent will work with you throughout the property buying journey. He or she first will learn about your homebuying goals and help you craft an effective property buying strategy. Next, a real estate agent will help you put your homebuying plan into action and ensure you can discover a house that matches your expectations. And once you discover your ideal home, a real estate agent will help you put together a competitive offer to purchase this residence.
As you prepare to kick off the homebuying journey, you should try to plan ahead as much as possible. By taking advantage of the aforementioned shortcuts, you can prepare for the homebuying journey and speed up the process of finding and purchasing your dream residence.
Kitchen and bathroom drawer slides are built to take a beating. You've undoubtedly had an item stuck and had to force the drawer open. Somehow it still worked after that. Children pull down on them, trying to climb up onto the cabinet. Mindless adults or teens slam them shut from time to time.
All of this wear and tear leaves you with a frustrating drawer that won't close smoothly or stay closed. But the great news is you don't have to live with lousy drawer slides. There's a straightforward fix.
What you'll need
- A screwdriver (probably a phillips head, but take a look at the screws)
- New slides, also called glides
- Straight edge
- Tape measure
- 3/32-inch drill bit
- Power drill with screw tip
Step one: prepare your area
Start by taking everything out of the drawer. Make some room on the counter to set your supplies as you work. *Pro tip* It's amazing how quickly little screws can disappear. Please put them in a bowl rather than laying them on the counter and hoping they stay there. You may reuse them.
Step two: remove the drawer slides
Remove the drawer and unscrew the slides from each side of the drawer. You'll find their counterparts inside the space where the drawer came out. Unscrew those as well.
Step three: attach new drawer slides
You'll have a left and right drawer slide. Each will have two parts, one for under the cabinet and one for on the drawer. Place the right pieces and left pieces together so you don't mix them up.
For those who want to conduct a successful home search, it is important to plan ahead as much as you can. Fortunately, there are lots of things you can do to get ready to pursue your dream home and speed up your house search.
Now, let's take a look at three tips to help you reduce the time it takes to discover your dream house.
1. Craft Homebuying Criteria
Homebuying criteria allows you to narrow your house search. Thus, if you make a list of home must-haves and wants today, you may be better equipped than ever before to streamline your quest to find your dream residence.
You also should consider where you want to reside. Because if you can hone your home search to your preferred cities and towns, you should have no trouble discovering your ideal residence in no time at all.
2. Prepare a Budget
A homebuying budget is essential, especially for a buyer who wants to accelerate the property buying journey. Thankfully, banks and credit unions are available that can help you put together a property buying budget.
Set up meetings with banks and credit unions in your city or town. Then, you can review a wide range of mortgage options and receive expert responses to your home financing concerns and questions.
It often helps to consider costs you may encounter during the homebuying journey too. From house closing costs to home inspection fees, you'll need to be able to cover various expenses as you try to acquire your dream residence. But if you start planning for assorted homebuying costs today, you can ensure that you'll have the funds available to cover these expenses.
3. Hire a Real Estate Agent
If you are unsure about how to discover your dream home as quickly as possible, there is no need to worry. Real estate agents are available in cities and towns nationwide, and these housing market professionals will do whatever it takes to help you accelerate your home search.
A real estate agent is a homebuying professional who is happy to assist you in any way possible. He or she will craft a personalized homebuying strategy for you and help you narrow your house search. Plus, a real estate agent will set up home showings, help you weigh the pros and cons of different houses and ensure you can submit a competitive offer to purchase your dream residence.
Let's not forget about the assistance that a real estate agent will offer before you finalize your home purchase, either. A real estate agent can provide plenty of recommendations and suggestions to help you prepare for your home closing. Furthermore, he or she will go above and beyond the call of duty to help you minimize stress in the days leading up to your house closing.
Ready to acquire your ideal house? Use the aforementioned tips, and you can boost the likelihood of enjoying a fast, worry-free homebuying experience.