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A Primer on Selecting and Using the Right Table Saw
A Primer on Selecting and Using the Right Table Saw
Just imagine - the sharp, toothed blades of a table saw ripping through your stack of wood, cross cutting them with pinpoint accuracy on the marked line. Or consider this scenario: trimming...
Designing Professional Porch Railings
If you plan to install a professional looking porch railing for the first time you want to ensure you do it right the first time. This requires among other things proper design and proper planning. Properly designed railings require...
How Big A Hole Do You Have In Your Wall?
(NC)-Imagine punching a hole in one of your home's outside walls and feeling the cold, dry winter wind rush into your house. Now imagine what all that cold air will mean for next fall's heating bill.
The equivalent of such a hole is...
How Stained Glass Can Add Elegance To Your Home
If there is one way to throw a new light on your home, it's through the stained glass you put in your windows. Whether you want to enhance old windows by replacing some of the panes, or are complementing the new Pella windows you've installed,...
Installing Drywall: Mudding and Taping
Installing Drywall, or hanging drywall as the professionals usually refer to the task, can be done by the homeowner. However, it is usually best done with two or more people as it requires significant lifting of heavy material. Mudding and Taping...
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PMI – Private Mortgage Insurance
For most homeowners, the pride of ownership includes a consistent home improvement effort. While this makes sense, be careful you don’t improve the property so much that you can’t recover the costs when it is sold.
Home Improvement
You’ve picked up a heck of a deal on a home in a nice neighborhood. The purchase price was $200,000 and you put twenty five percent down [$50,000]. The comparable homes, “comps”, in the neighborhood appraised for $300,000. Yes, your home is a bit run down, but that’s why they have Home Depot and weekends! You’ll just fix the ugly ducking up and pocket a quick $100,000 in equity when all your projects are done. What a country!
This situation definitely has potential. The value of the home is so low when compared to the comps that a relatively quick equity grab certainly looks possible if the home can be fixed up. Off to Home Depot we go…
Let’s do an evaluation of our ugly ducking. Put another way, what needs to be done to get it on par with the other ducks in the neighborhood? Okay, we need new doors, new windows and landscaping in a very big way. The drive way looks like a toxic dump sat on it and we aren’t even going to get into the peeling, ugly paint on the home. Pricing everything, deciding to use homeowner labor as much as possible and so on, we find it is going to run roughly $50,000 to makeover our ugly duckling. It’s going to be a lot of work, but that’s what weekends are for. We should still come out with a $50,000 gain and $100,000 in total equity considering our $50,000 down payment.
Budgets and Temptation
The problem with the above scenario is it is very hard to stick to a budget. If
you’ve owned a home, you’re already familiar with this problem. If you are buying a home for the first time, watch out!
With homeownership, the structure you own quickly evolves into “my home.” Once this occurs, you tend to view the quality of your home as a statement to the world and you want to show the world your best. Instead of buying moderately priced cabinets for the kitchen, you buy custom pieces that would make Bill Gates envious. Counter tops soon become marble counter tops. Refinishing the driveway evolves into putting in an entirely new one with brick inlays. And so it goes.
You are no longer trying to bring your home up to the standard of the neighborhood homes. You are trying to turn the home into a swan and swans are expensive. After making all your improvements, you are distressed to find the total cost being $90,000 instead of $50,000. For all your hard work and effort, you’ve realized only a $10,000 gain in equity.
In Closing
Make sure you objectively budget improvements and stick to those budgets. While there is something to be said for making a home glow, make sure it makes financial sense.
About the Author: Dan Lewis is a mortgage broker with http://www.gwhomeloans.com - San Diego mortgage brokers providing home loans and refinances. Visit http://gwhomeloans.com/services.html to learn more about options for San Diego mortgages.
Source: www.isnare.com
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