Five Ways to Boost the Value of Your Home

Five Ways to Boost the Value of Your Home

With the number of potential home buyers looking for new homes these days, it could be the perfect time to sell. Here are some things you can do to improve your home and increase its selling value.

With mortgage rates at a steal these days, there are many people in the market to buy a new home. Whether it is their first home or their tenth home, they are going to be looking for something that catches their eye and looks like it has been cared for and maintained over the years. As such, here are some things you can do to your home if you want to get it ready to put on the market.

Replace the Front Door
One of the first things a potential buyer is going to see is your front door. If it is wooden or simply weathered and worn, it will not make a good first impression. Replace your entry door with a new steel door to give the sense of newness and security to your home. You can get midrange steel doors for about $1200 but you will recoup about 130% of that cost with that simple improvement.

Renovate the Attic
By making the attic into another room, you automatically add a significant amount to your home’s value. It may take about $49,000 to convert the attic into a bedroom or some other type of room, but you will recoup most of that cost by adding that value to your home.

Add a Deck
A wooden deck is a great place to enjoy the spring and autumn breeze or just cool off in the summer months. It can also add about $10,000 to the value of your home. You will probably spend about that much building the deck, depending on its size and quality, but it will help your home sell faster and give it more appeal to potential buyers.

Finish the Basement
It’s hard to sell a home these days with an unfinished basement. Depending on the size of your home and the type of work your basement needs, you could spend about $62,000 finishing your basement and making it into another living area. You may not recoup that much when you sell the home, but making it more appealing and helping it sell faster will save you money in the long run.

Replace the Roof
If you have had your home for many years and you have never replaced the roof, it might be a good time to do it before placing it on the market. Replacing your roof will not only make your home more appealing to buyers, but it will also help ensure that your home is up to code and there are no major leaks in the roof that will cause the home to fail inspection. It’s better to have it fixed before buyers look at it instead of waiting until it fails inspection because then you will be trying to fix it in a hurry and making bad financial decisions along the way.

What are My Mortgage Options?

What are My Mortgage Options?

There are many mortgage options available when buying a home. Which one is the right one for your financial situation?

Are you a first-time homebuyer hoping to take advantage of today’s mortgage rates but are unsure of the type of mortgage you should get? There are several types of mortgage options out there and you may only qualify for a certain kind. However, if you are eligible to choose your own mortgage, here are the main types there are so you can make a more informed decision.

Fixed-Rate Mortgages
These are probably the most common and secure types of mortgage. With a fixed-rate mortgage, you can expect to pay the same amount on your mortgage payments each month because the interest rate is locked in for the life of your mortgage. There are no surprises like higher monthly payments or fees that you may get with other mortgages. This makes it easy to plan and budget you money since you know how much you need to set aside for your mortgage payment all the time.

Adjustable-Rate Mortgages
These are fairly common types of mortgages these days, but you might otherwise know them as ARMs. With an adjustable rate mortgage, the payment each month fluctuates according to the general interest rate. When mortgage rates are as low as they are today, you would pay a lower mortgage payment each month. Unfortunately, when the general interest rates go back up, however, you would be stuck paying a much larger payment than usual. This makes it hard to plan and budget your money and you could be expected to pay a monthly payment that is more than you can afford. This is why many people have had to leave their homes in recent years because of foreclosures.

Hybrid Mortgages
With hybrid mortgages, you have a fixed rate for a certain number of months or years and then your mortgage switches to an adjustable rate. An example of this would be called a 5/1 ARM. With this hybrid mortgage, you would pay the fixed monthly payment for the first five years and then your rate would be adjusted each year after the initial five years. Your mortgage payment would change each year based on the general interest rate at the time it was modified.

Interest-Only Mortgages
With an interest-only mortgage, you pay payments only on the interest for a set number of years before you begin paying on the principle. Then, after the set time period is over, you will begin making full payments on both the interest and the principle. This is not very common but some new homebuyers choose it because the interest-only payments are fairly low compared to the full mortgage payments and they predict they will be in a better financial situation by the time the full payments begin.

Before making the final decision on a mortgage, consult with some qualified mortgage professionals in your area. It’s a major financial decision that will last for many years to come. Don’t take it lightly, but be realistic about what you can afford before signing any papers.

Determining How Much House You Can Afford

Overspending on a house was a major contributor to the real estate bubble and its subsequent collapse. To minimize the potential for future problems and the threat of foreclosures, make sure you accurately project your costs and income to determine how much mortgage you can afford.

Overspending and losing a house to foreclosure can impact the wealthy as well.

Below, one of our new contributors Lynne Ashminov shares some thoughts on what to keep in mind when determining how much you can afford. The bottom line: be honest about your finances and don't use any government-like budget tricks to make the budget fits the house.