Home Equity Tips

• Upgrades and remodels can increase your home's overall value.home sweet home image by David Dorner from Fotolia.com
  
  Home equity is the difference between what you currently owe on your home and the amount of the full market value of your home determined by a home appraisal or a statement from the tax assessor’s office. Increasing your home equity increases your ability to be able to use it as collateral for loans and may help you profit more during the sale of your home.
  
  

Finances

• Making extra payments on your home loan helps to bring the balance down quicker and saves you money by paying less in accrued interest on the loan. Some lenders will allow you to make bi-monthly payments, letting you split your mortgage payment in half, with half going directly to the principal of the loan, helping you to pay down the balance even faster. Some lenders will hold the half payment until the other half is received and then apply the full payment to the current balance. In those cases, making larger payments every month and applying extra funds received throughout the year will be beneficial.
  
  

Improvements

• Making improvements and upgrades in your home can increase its overall value during an appraisal process. During a home appraisal, you’ll be able to inform the appraiser on what type of material you used when upgrading the home, enhancements you may have added to unseen areas of the home, such as to insulation or electrical systems ,and provide copies of lifetime warranties that may exist for things like windows or roofs.
  
  

Maintenance

• If you cannot afford to make upgrades or perform remodels to the home, keeping the home in a tidy, organized and well-working fashion can still benefit you. For example, keep the lawns mowed and the edges neatly manicured near any fencing. Use a pressure washer to keep the outside walls clean of mud, mold and other filth. If the home needs a fresh coat of paint, then invest time in painting the home. Enlist the help of friends, neighbors or groups of people from local places of worship that may offer free services. Keep gardens and flowerbeds free of weeds and prune back any trees, bushes or shrubs to make the landscape appear well-manicured.
  
  On the inside of the home, perform regularly-recommended maintenance to appliances and keep all smoke alarms in working condition. Shampoo the carpets no less than once per year and more if you have children, pets or smoke indoors. Paint the inside of your home if you need to. Paint one room at a time if that is all the budget allows. Every little bit counts.