Low-interest rates have many homeowners wondering if it’s a good time to refinance. Refinancing can save you a lot of money in the long term when done correctly. It’s important to consider the drawbacks as well. Here are some reasons why you might want to refinance, and a few things to be cautious of.
Reasons you may want to refinance:
1. To lower your monthly payment. If today’s interest rates are lower than when you purchased your home, refinancing to a lower rate will reduce your monthly payment down, freeing up cash to help with other bills, your children’s education, or to save towards retirement.
2. To pay off your mortgage earlier. A great way to use the money you save with a lower mortgage payment is to apply it right to your principle, which will help you pay your loan off earlier.
3. To take advantage of a better credit score. If your credit score has increased significantly since you bought your home, you may get a better loan if you refinance.
4. To save on total interest. For some, the desire to pay less interest overall makes refinancing an attractive option. Reducing the interest rate and/or the loan term will save you money long term.
5. To change loan types. If you have an adjustable-rate mortgage that has been increasing or is nearing the end of the fixed period, you may want to switch to a fixed-rate mortgage.
If you have extra cash on hand to make larger monthly payments, it may make sense to change to a 15-year mortgage so you can pay it off earlier.
6. To consolidate debt or take cash out. If you have built up equity in your home, you may be able to borrow against your home to obtain cash to pay off higher-interest debt, to make improvements on your home, or for things like your children’s education or medical expenses.
If you think that refinancing is the best option for you, I have several lender partners that will take great care of you. Reach out to me and I’ll send you their info!
Choosing fixtures for your home can be complicated. If you’ve ever visited a lighting store, you know exactly what I’m talking about. To break it down into bite-sized bits, it might be helpful to review the three different types of lighting:
Ambient lighting: the main source of light in a room (think overhead fixtures or recessed lighting).
Task lighting: the lighting “tasked” for activities such as working or reading (meant to illuminate a small area; not an entire room).
Accent lighting: the most decorative lighting in a room (think chandeliers, sconces, and lamps).
As you plan, remember most rooms have two types of lighting—some all three. Make a list of the rooms in your home and the different types of lighting you need. Then, you can shop with clarity and purpose even amidst the blinding lights.
Home equity…Everybody wants it, but what exactly is it, and how do you get it?
Equity represents the degree of ownership an individual or entity has in an asset after subtracting any debts against the asset. To say someone shares equity in a company means they would share in any assets remaining after all debts are accounted for.
For example, if your business has sold $500,000 worth of product this year, but you have rent, operating expenses, and a business loan payment totaling $400,000 for the year, you have $100,000 of equity in your business. Equity changes as the value of your assets and debts change.
Home equity works the same way. When you take out a mortgage to purchase a home, your home is collateral on the mortgage loan, so the outstanding mortgage principal must be deducted from the value of the home to determine your home equity.
In most cases, you make a down payment when you purchase your home. That down payment is your initial home equity. If you pay a 20% down payment on a $200,000 home, you have $40,000 equity when you close on your purchase.
As time goes on and you continue to pay down your mortgage principal, your equity grows. Usually, the longer your own your home, the more equity you gain because you are paying down your mortgage. However, any debts you take on using your home value as collateral, such as a second mortgage or home equity line of credit (HELOC,) decrease your home equity.
The changing real estate market also influences your equity. If you paid $200,000 for your home, and two years later the homes in your neighborhood start selling in the $400,000 range, your theoretical equity increases. (Theoretical because you don’t realize your home equity until you sell your home and pay off all debts against it.) You can also lose equity if the market takes a dive but be patient and it should recover in time.
Equity also grows if you make improvements on your home that increase its value. Let’s say you add a swimming pool and all new appliances. You have increased the value of the home. Your equity doesn’t increase by the amount your spent on the improvements, but on the value you get upon resale. This is an important point when considering making improvements prior to putting your home on the market, and one that is often misunderstood.
Let’s say Joe spends $50,000 on upgrades to his home. He might tell his neighbor, “I have $50,000 in my home,” but when he goes to sell, the current market dictates how much he will actually get in return. If Joe ends up selling for $40,000 more than he originally paid, his $50,000 investment got him $40,000 in home equity.
Some things you can do to increase your home equity include:
1) Make a large down payment when you purchase your home. The more cash you put down, the more equity you begin with.
2) Make increased or extra payments on your mortgage principal. Adding to the principal portion only on your monthly payments, or making extra payments when you are able, helps chip away at your outstanding debt.
3) Be smart when making home improvements. Not all improvements build equity. Some improvements may be personal preferences that don’t necessarily add value for resale. Improvements such as a new HVAC system, new appliances, or a new roof are usually more reliable investments than a fountain in the front yard or surround sound speakers throughout the house.
4) Don’t borrow against your home equity unless you must. Home equity is often a homeowner’s biggest asset, and can help to build your retirement nest egg, but it can also come in handy if life throws you a curve ball and you need to borrow against it for an unforeseen emergency. Be careful not to borrow against your equity for frivolous purposes, so it will be there if you really need it.
5) Sell when the market is favorable. If you are counting on your home equity to help finance your next home, pay for your children’s education, or add to your retirement funds, try to sell during a seller’s market when inventory is needed in your area.
Comments Off on 7 Tips for Saying Goodbye to Sentimental Belongings
by liz
When I work with clients who are downsizing to a smaller home, one of the hardest chores they face is letting go of sentimental belongings they no longer have room for. Souvenirs collected during travels, family heirlooms, and your children’s keepsakes can be quite stressful to part with. It doesn’t matter whether the items have monetary value or not; in fact, often the most difficult items to let go of are worthless in terms of money, but priceless in sentimental value.
Here are some tips to help you part with belongings you are attached to but no longer want to keep.
1. Remember that our memories reside within us, not within our possessions. Psychologists say that letting go of sentimental items can be extremely therapeutic. When we keep things, the items occupy both physical and mental space in our lives. It’s healthier to focus on your memories and not the items that represent your memories.
2. Focus on the present. Letting go also helps to bring your focus to the present. Sometimes things are continual reminders of the past and hold us back from living in the present. Dwelling in the past can make one more prone to depression and can affect our ability to deal with stressful situations in our lives. Realize that while we can always cherish our memories, we don’t need the past to be happy in the present.
3. Let go of guilt. People often hold onto an item they don’t want or need because someone special gave it to them or it represents a special person. Learn to let go of the guilt associated with getting rid of gifts you can’t use. Appreciate the thoughtfulness of the giver or the special memory it represents but pass the item on to someone else who can use it or donate it to charity.
4. Don’t save it for your grown children. Times have changed and today more young adults are able to buy their own furnishings. And they aren’t as sentimental about family heirlooms as prior generations were. Talk to your kids now and find out if you are holding onto your china, crystal, and silver tea service for nothing.
5. Compromise with your spouse. It’s not uncommon for one spouse to resent the others’ favorite belongings while holding onto their own special stuff. It’s important to recognize that, while you may not understand your husband’s need to keep a ball cap for every MLB team he’s seen play, he may feel the same way about his hats that you do about keeping every book you have read. Decide together on a reasonable number to keep.
6. Start with the easy stuff. If you have a lot of belongings to sort through, start with the easier decisions and work from there. Often people find that once they get some momentum going it feels good to let go.
7. Write a family memoir. Hold onto your memories with words instead of things by writing your memoir or the story of your family. Writing your story can be very therapeutic and can help you release your hold on tangible items. If you need help, try a service like Storyworth.com.
Comments Off on Transform Your Kitchen Island Without a Complete Remodel
by liz
Renovating an entire kitchen can feel like a monumental project — and it is! So if you’re not quite ready for the whole enchilada, transform your space quickly and for little cost with a kitchen island makeover. Not only is your island the focal point of your kitchen, but it’s also a multifunctional space that can be fully customized to your liking! Then, when the time comes for the full kitchen renovation, you can use it to inspire the rest of your design. Here are a few ways to rework your island space:
Paint the island cabinets an accent color to bring in a fresh feel and add some dimension.
Go for an entirely new look and add a waterfall counter that makes your island a showpiece.
Redesign and give your island an asymmetrical shape that adds a unique look while providing plenty of storage and seating.
Floating, built-in, corner, freestanding, hanging, open — so many types of shelves each beautiful in their own way! They pose just one head-scratching problem: What in the world to put on all of them that’ll look pulled-together while keeping them functional? Two everyday items that’ll never lead you astray? Woven baskets and plants. Baskets are a simple solution when you need more storage. Place identical ones on any shelf to house books, remotes, charging cords, and other small items. Large baskets on lower shelves are perfect for stowing away extra throw blankets and pillows.
Houseplants also solve almost any shelving conundrum. A few ideas: • A potted succulent on top of a stack of books • A snake plant on a fireplace mantel pop resting alongside treasured books, objects, and artwork • A trailing ivy on a top shelf to soften hard lines and produce a cascading effect
A few of my favorite places to find fun items to decorate with: Home Goods, Target, Hobby Lobby, and the At Home Store. Don’t forget to look around the house and storage for family heirlooms, souvenirs, and other items that bring you joy. Piece together the things that bring you joy and make you feel at home. And here’s the good news — when decorating shelves, nothing is set in stone! Play around with different arrangements until you step back and think, “Yes! That’s it!”
Ever had a designer throw out a word you didn’t know? Not wanting to embarrass yourself, you nod in agreement and try to keep up with the convo. Never again! Here are 8 interior design terms that’ll keep you tracking right along:
Arabesque: a decorative pattern with overlaid flowers, foliage, fruits, or scrolls.
Bolster: a cylindrical-shaped pillow.
Hygge (pronounced ‘hoo-guh’): a word that describes a feeling of coziness and a sense of contentment or well-being.
Etagere: a freestanding or hanging set of open shelves designed for decorative objects.
Settee: an upholstered piece of furniture long enough to seat two people.
Wainscoting: Interior wall paneling that covers the lower part of a wall.
Kelvin: the unit of measurement that relates to the color of a light source. The higher the number, the closer the shade is to sunlight.
Feng shui: A method of Chinese design based around energy forces. It’s intended to bring homeowners in harmony with their environment.
Niche: A niche is a recessed area in a wall or room — perfect for a small piece of furniture or disguised storage, your designer can help you make the best use of the tucked-away space.
Leadtime: Got a design project in the works? You’ll wanna ask about leadtime. What is it? It’s the time between when you order and when an item ships. Custom furniture and other items often have a leadtime of 8-12 weeks depending on the manufacturer.
Scale: Everything in a space needs to gel and jive. Understanding “scale” is how that happens. Scale is simply how the size of one object relates to the size of the other objects in a room.
Bouclé: Texture is all the rage these days. Bouclé is one textured textile containing nubby, looped yarn often in two different shades.
Monochromatic: Don’t be thrown off by the five-syllable word! What it means is this: a color scheme designed around a single color.
This should give you a leg up when working with a designer. But remember, it’s ALWAYS right to ask if you aren’t sure what something means. It’s your home, and you deserve to not only understand but to love where your designer is heading!
Comments Off on 5 Reasons to Review the Market Value of Your Home Annually
by liz
1. REMOVE PRIVATE MORTGAGE INSURANCE (PMI)
Lenders typically require you to purchase private mortgage insurance (PMI) if you put less than 20% down on your house. PMI typically amounts to between 0.5%-1% of the purchase price. For a $200,000 mortgage, your PMI could be costing you $1,000 to $2,000 per year. However, on the date when your principal balance is scheduled to fall to 80% of the home’s original value (or in other words you build up at least 20% equity in your home), you have the right to request that your servicer cancel PMI.
To qualify to remove PMI, you can reach that 80% threshold by paying down your mortgage every month. Additionally, by reviewing this Annual Market Update you can determine if property values are rising in your neighborhood and you have gained 20% equity to remove your PMI.
For example: If you purchased your house for $250,000 a few years ago and based on the information provided to you in this report, you estimate the current value of your home to be $275,000. If your outstanding mortgage balance is less than $220,000 (or 80% of $275,000)then you may be able to remove the PMI. That’s a lower threshold than 80% of
$250,000, where your outstanding balance would be capped at $200,000 to qualify for PMI removal. In this case rising home values have increased your stake in the property, making you a potentially lower-risk borrower.
2. ENSURE THAT YOU ARE BEING TAXED PROPERLY
The one downside to escalating property value: higher property taxes. However, if you feel the tax jump from one year to another is higher than it should be, you can fight it by appealing the city’s assessment for a lower payment.
If — based on informal research or an official appraisal — you feel you’re overpaying on property taxes, you can appeal to your county or municipality to have your taxes lowered. The appeal process varies by area, but you’ll likely submit a written request within a specified timeline. If you suspect this might be the case for you, lets talk. I can help you with the process.
3. KEEP AN EYE ON THE MARKET TO DETERMINE THE BEST TIME TO SELL
Are you thinking that this year or in the next year or two? Keeping up with your homes value and talking with a Realtor can help give you you an idea of trends, growth, or slowdown in the area and your property in particular.
4. FIND OUT HOW MUCH EQUITY YOU HAVE BUILT UP
Understanding equity, or the current market value of your home minus your outstanding mortgage balance, puts you in a better place to understand your finances overall. You may be beginning to think about a move and knowing the value of your property could lead to an accelerated sale timeline. There’s no hard and fast rule when it comes to having enough equity to sell your home, but generally the more of your home you own, the more money you’ll make in the case of a sale.
Knowing how much equity you’ve built up will also give you the opportunity to take out a Home Equity Loan, a Line of Credit or Refinance. When you reach the point where the value of your home is more than what you owe on the mortgage, you may be able to borrow against your home equity. This can help you access the financing you need to add value to your property with a strategic home renovation or improvement, or even use it to invest in additional property. Knowing your home’s value can make the investment work for you.
5. ENSURE THAT YOUR HOMEOWNERS INSURANCE COVERS YOUR FULL PROPERTY VALUE
If you discover your home’s value has significantly increased, now may be a good time to reevaluate your homeowner’s insurance policy. If your home is undervalued in your policy, it could mean you’re not covered for the cost of its full value should something unfortunate were to happen. When you first bought your home and drew up an insurance policy, it should have covered at least what you paid for your home. As time has gone by, whether it’s a few years or decades, your home has likely increased in value. Your original home insurance policy might not be enough coverage. Your insurance company probably has policies in place for general inflation, but if you find your home has dramatically increased in value, or you’ve added an addition or made updates, it’s time to talk to your home insurance company. You’ll want to take a look at your insurance dwelling limit, or estimated cost to rebuild the home as it stands now. If you’ve updated or expanded your home, this will have changed since the time of purchase.
I am happy to provide you with yearly Market Updates. Feel free to call, email or text me. I’d love to help!
Comments Off on Your Front Door, Paint or Replace?
by liz
It’s the first thing that people notice when they arrive at your home. You know it needs some TLC, but should you paint it or replace it?
Here are a few tips to help you identify which DIY path is right for you:
If your current front door is wood (or painted wood), you can sand and repaint/restain it for little more than $100 and a bit of elbow grease. If your current door is steel and spotted with rust, dents, and dings, you may want to consider a new exterior door.
If you decide to replace your door, consider fiberglass. Fiberglass has the lowest maintenance when compared with wood and steel.
Try this. Shut your front door from the inside of your home, and take a few steps back. If you see light shining through the bottom of the door, other things like drafts, water, insects may seep in.
The bottom line is this: If your wood door is in great shape, just paint it. You can always go back and replace it later. If your door isn’t functioning well… like a door, it’s probably time to replace it.
Comments Off on Fresh Year, Fresh Start: Cleaning Out Your Home for the New Year
by liz
Many of us could not wait to close the door on 2020 and usher in the new year– and all the positive karma we hope comes with it! As you look forward to 2021 you may have spent some time thinking about your intentions for the coming year, whether for personal or professional growth, health and fitness, or family goals. Let’s face it, 2020 was stressful, and while many people look to each new year to freshen up their lives, this year more than ever people are looking inward to reexamine what is important to them. But one thing that is just as important as setting intentions for your behaviors or habits is creating a peaceful and joyful place in which to practice your intentions.
If you, like most Americans, spent a record amount of time inside your home last year due to the pandemic, you may have accumulated more stuff than you have in previous years. Many people acquired new hobbies to pass the time at home, started – and maybe even finished – home improvement projects, or simply went a little overboard with boredom-induced online shopping. If this sounds familiar, it may be time for a decluttering session.
Living with too much stuff can cause stress, anxiety, and depression. People with too much clutter in their environment also tend to suffer from relationship issues, sleep problems, and chronic allergies or asthma.
So, before you pack a suitcase and hop on a flight for that vacation that got cancelled last year, take some time to clean out your home for the new year. Here are a few strategies recommended by professional organizers.
1. One category at a time: This method is used by Marie Kondo, author of the bestselling book The Life-Changing Magic of Tidying Up, and TV show, Tidying Up with Marie Kondo. She advocates for decluttering items by category: clothes, books, papers, miscellaneous items, and sentimental items, in that order.
2. One room at a time: Another method is to focus on one area at a time. It could be a room, the garage, or the attic. If that amount of space is still overwhelming to you, break it down to one closet, one cabinet, or one drawer at a time.
3. Arrange keep, sell, and donate spaces. As you progress through your decluttering, it will save time and energy if you have already designated areas to accumulate items that are to be kept, sold, or donated. Then you can deal with each group of items once you have everything separated.
Once you have cleaned out your home, you might adopt some of these habits for preventing clutter from piling up again:
1. Set a rule where you don’t purchase a new piece of clothing, toy, book, or gadget without getting rid of something you are no longer using.
2. Get into the habit of always putting everything back in its place. This will keep you from purchasing items you already have but can’t find or forgot about.
3. To prevent clothes from piling up, try choosing your outfits for the coming week every Sunday, and don’t let clean laundry sit unfolded. (I’m so guilty of this. Folding laundry is one of my least favorite chores…)
4. Look through your refrigerator and pantry before shopping and shop with a list of needed items.
5. Live by the rule that if you haven’t used it or worn it in the past year, chances are you don’t need it.
