If you are thinking of adding an addition to your home there are some things you will wants to be aware of.
If you decide to add a new space, ask yourself the following questions:
* Can I finance the home improvement with my own cash or will I need a loan?
* How much equity is in the property? A fair amount will make it that much easier to get a loan for home improvements.
* Is it feasible to expand the current space for an addition?
* What is permissible under local zoning and building laws? Despite your deep yearning for a new sunroom or garage, you will need to know if your town or city will allow such improvements.
* Should I make the improvement myself or hire a contractor?
Many homeowners consider going to job alone to save money. Consider how much time you have, your level of expertise or willingness to handle the job, amount of help from friends or relatives, and how much you want, or need, to save by doing the job yourself. You could save up to 20 percent of the project cost through your own hard work.
Be aware, however, that you may need to call in the pros. Going it alone can sometimes lead to spending more time and money. if problems arise.
Most home improvement experts suggest that homeowners who do not have a lot of experience should stick to painting, minor landscaping, building interior shelving, and other minor improvements.
Unlike most other investments, your home can actually make money for you. Using energy efficiency tax credits, making shrewd decisions about home improvement projects, and taking advantage of the work shortage in the building industry can all put cash in your pocket. As ranked by Remodeling magazine, here are some top money-making remodels:
1. Installing a new entry door (steel)
Job cost: $1,218
Value added: $1,243
Cost recouped: 102%
Job cost: $1,291
Value added: $1,083
Cost recouped: 84%
Job cost: $21,695
Value added: $15,790
Cost recouped: 73%
Job cost: $10,973
Value added: $7,986
Cost recouped: 73%
Job cost: $11,357
Value added: $8,223
Cost recouped: 72%
Do you owe more than your house is worth? You are not alone. Many homeowners are finding themselves in with a house that they owe more than its current market value. So what should you do?
Here are some options for homeowners with “underwater” mortgages:
Stay and Pay
Compare the monthly mortgage payment, plus carrying costs like repairs, homeowner dues and taxes, to the cost of renting. If you decide to stay and pay, you may be able to get financial help to catch up with payments if you run into a financial hardship. For example, the Emergency Homeowners Loan Program (EHLP) provides interest-free loans to homeowners who have fallen behind on their mortgages. Make sure to check with a HUD-approved housing counseling agency in your area to find out which programs may be available to you.
Refinance
The Home Affordable Refinance Program (HARP) helps homeowners who qualify refinance into a low, fixed-rate loan. The program has been extended through June 2012. For those who qualify, the terms are similar to those of any other conventional loan, but without the steep mortgage insurance that is typically required when there is less than 20% equity in the home.
Loan Modification
A loan modification means lenders lower the interest rate and payment, either temporarily or permanently. Lenders will also typically extend the term of the loan or to allow borrowers to make up missed payments by tacking them onto the end of the loan or spreading them out over the remainder.
The most well-known modification program is the government-initiated Home Affordable Modification Program. The Treasury Department reports that homeowners who were successful in getting permanent modifications on their loans through this program saw a median reduction in their monthly payment of 40 percent—more than $520 each month—amounting to a program‐wide savings for homeowners of an estimated $4.5 billion.
Short Sale
A short sale is when you sell your home for less than you owe. For the homeowner/seller, the goal is to get the lender to approve a short sale and forgive any remaining debt. Lenders do not always accept a short sale. It seems to make sense rather than allowing a home to go into foreclosure, but the red tape involved in a short sale can sometimes be overwhelming. The Home Affordable Foreclosure Alternative program (HAFA) is a government-initiated short sale program.
Foreclosure
According to RealtyTrac, one in every 605 homes received a foreclosure filing notice in May 2011. Foreclosure can have financial, legal and tax implications. For many homeowners, this is their last alternative.
Bankruptcy
If you need to stop a pending foreclosure, bankruptcy may halt a foreclosure long enough to get a loan modification considered. Filing Chapter 13 can help you catch up on payments over five years without interest. You may be able to reduce or eliminate other debts, freeing up more money to pay toward the home mortgage so you can get back to positive equity more quickly. This can be a very serious decision so it is imperative that you talk with a bankruptcy attorney before the foreclosure or short sale is completed.
In today’s economic climate protecting your financial health is more important than ever. From health insurance to your plans for retirement, there’s a lot to consider. Here are some tips from Family Wealth Management Group, LLC to help protect your assets and financial future.
It is never too early to plan
In order to plan, you need to know what you have. Review your pension plan, 401 (k), IRAs, Social Security benefits and other savings plans to assess whether they meet your long-term retirement goals and will generate an income stream to meet your projected expenses.
Curb spending
Time to take an inventory on how much you spend. Keep a log on trips to the market, afternoon lattes, dry cleaning and all of your miscellaneous spending. Try to eliminate a portion of these expenses. Once you track them you will realize you are spending more than you thought.
Re-define your financial goals
Ask yourself where you see yourself in five, 10 or 15 years. See if it is possible to redefine your goals. You may be able to retire earlier or pay for college. Set goals to achieve the things you want.
Get help
Professional advice about investment losses, financial products, insurance coverage and other important issues will help you make the right choices for your current financial situation.
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