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| Five Ways to Build Home Equity |
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Whether you currently own a home or are thinking of purchasing one, you may be looking for ways to build equity. Home equity is the overall difference between the amount you owe on your mortgage loan and your home's market value (Equity = What the Home is Worth - What You Owe on the Home). Home equity can be used to take out a loan, invest, build long term wealth or sell your home for more than you owe and keep the profit.
The equity you have access to will increase as you make payments that pay off your mortgage balance. It can also grow when your home's value increases. The following details five of the quickest ways to build home equity.
1. Make a Larger Down Payment
The simplest and quickest way to build equity in a home is to make a large down payment when you first buy the property. The down payment you make is immediate equity. Let's say that you're buying a home for $200,000. With a $10,000 down payment, you'll owe $190,000 on the mortgage and have $10,000 in equity.
If you can afford it, you could instead choose to make a down payment of $40,000, which means that you would owe $160,000 on the mortgage and have $40,000 in equity when you first move in. Keep in mind that a 20% down payment will also remove the private mortgage insurance requirements for conventional loans, which is an added benefit.
2. Make Mortgage Payments More Often
Only a percentage of the mortgage payment you make each month is put towards the principal of your house. The remainder of the payment goes towards interest and taxes. When you make additional payments or provide a payment that's higher than the minimum amount, you are putting more money toward the principal and increasing your equity.
3. Consider a 15-year Mortgage
If you take out a 15-year mortgage as opposed to a 30-year one, your monthly mortgage payments will be significantly larger. When you take this approach, you’ll be paying off more of the principal each month, which will help you build equity quicker. You'll also pay less interest over the course of the loan.
If you've already purchased your home, you could decide to refinance the mortgage loan, which would allow you to switch from a 30-year loan to a 15-year option and build equity faster. Make sure that you can afford the higher monthly payments before choosing this solution, and make sure you take current interest rates into account as well.
4. Invest in Home Improvement and Remodeling Projects
You can also build equity in your home by investing in home improvement and remodeling projects that will increase the home's value. The most popular renovations include kitchen and bathroom remodels. Make sure that you select projects that will get you the best return-on-investment (ROI). Reach out if you want to discuss projects with the highest ROI in our area.
5. Use Gifts and Windfalls
Consider building equity by using any gifts or windfalls you receive to pay down the balance of the loan. Do you receive birthday or holiday gift cards? If so, these can be converted to cash and added to your mortgage payment. The same is true of any inheritance you receive.
Building home equity gives you financial security and allows you to prepare for your future. By making a large down payment, paying more money each month, and improving the quality of your home, you can build equity relatively quickly. |
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| Tips for a Successful Yard Sale |
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Yard sales are a great way to convert items that you hardly ever use into cash that can be saved, donated, or put towards a large purchase. However, a successful yard sale takes a considerable amount of preparation and planning. Here are some tips on how to hold a great yard sale.
 Set a Goal
First, it's a good idea to think about why you want to hold a yard sale. Are you hoping to generate income or use the sale to get rid of items you're no longer using? Having a goal in mind can help you decide what to sell, how to price your items, and how flexible you want to be with hagglers.
Choose the Right Date
The best days to host a yard sale are usually Friday and Saturday. Consider the first Friday or Saturday of the month, after most people receive their paychecks and have more money to spend. Try to pick a date and time when you expect the weather to be mild and dry. You can’t predict or control the weather, but you can do a little internet research to see which weekends have had the best weather historically.
Price Out Items as You Gather Them
To avoid rushing, don't price everything on the day before the sale. As you are collecting items to sell, you can create a comprehensive price list or go ahead and label each item with a price sticker. When pricing each item, think like your customers. They want every item to be at a steep discount.
Properly Advertise Your Yard Sale
Hang flyers and post online ads about the sale a couple weeks before it begins. You should also inform the people you know on social media a few days before the sale. Highlight any sought-after items that will be available in your sale, which can include furniture, specialty tools, collectibles, and toys. Make sure that you include the date and time of the sale as well as your full address.
Complete Preparations Early
In the week preceding the sale, gather as many tables as possible. If your friends or family can lend you a table, call them to ask well ahead of time. You should also have a cash box on hand with a wide variety of bills. Some additional items you may need include:
- Batteries
- Extension cords
- Light bulbs
- Calculator
- Chairs
- Cooler with drinks
- Hand sanitizer
- Pens
- Receipt book
- Sold tags
- Paper or plastic bags
Make Sure All Items are in Good Condition
Every item you're selling should be in good, usable condition. Make sure that you include working batteries in electronic devices and pump air into any basketballs or soccer balls. Have someone on hand during the day to rearrange items and fold clothing so everything looks tidy and well cared for.
As long as you choose the right date, properly advertise the sale, and prepare for the event, you should avoid most of the problems that can occur when hosting a yard sale. |
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