What are your 2021 home goals?

2021 is finally here!

All of us here at MBA are excited about the opportunities this year will bring! You’re likely already looking ahead with goals in mind. Rest assured that we’re here to help you plan through all the changes and opportunities waiting for you.

Ready to own?

Turn your rent check into a mortgage payment.

It’s no secret that homeownership is the most popular way to build wealth. If you’re currently renting, you know better than anyone that cutting a rent check every month produces little return on investment.

Sure, renters have fewer financial commitments in the short-term, but they also sacrifice wealth building in the long-term. You may be saving on repairs and property taxes, but in 10 years, you’re missing out on equity that could help jumpstart your life.

Then there’s the issue of saving. It’s hard to save money when your monthly payments are going out the door to a landlord. By contrast, every mortgage payment is an investment into an asset that you own. Think of your home as a giant savings account. You don’t get this by leasing an apartment.

Let’s look at the below table from the First American. It shares the average net worth of homeowners compared to renters. 

Notice how only one category out of six showed a loss in net worth. If you’re like most Americans earning between $26K and $74K a year, then you’re in a great position to make homeownership work for your bottom line.

Home equity:

What it is, and how you can make it work for you!

Your home’s equity is the amount of market value accrued minus the amount you owe on your mortgage. Essentially, it represents a piece of your total net worth as a homeowner.

There are two main ways that you’re able to put this equity to work for you:

 

Selling your home.

If you’ve built up enough equity in your home, whatever is left after you sell it is yours. In this scenario, your equity becomes profit. Let’s imagine that you’ve paid off $150K of your mortgage. You then sell your home for $350K. You’d walk away with $250K. Not bad.

Refinancing your mortgage.

Planning on staying put? Don’t worry; your equity can still help you reach your financial goals. You can refinance for a lower rate, which would lower your monthly payments. Interest rates are at historical lows, so now could be the time to save on a month-to-month basis. Of course, you could keep paying the same amount and lessen the overall term of your loan.

You can also borrow against your home’s equity to make large purchases or finance a child’s education. I help people make these decisions every day. Reach out to me, and I’ll evaluate your situation and help you reach your financial goals.

 

Speaking of building wealth…

The reality of building wealth through homeownership isn’t going away any time soon. Experts who analyze the housing market are confident that home prices will continue to rise as time goes on.

Want proof? Look at the Home Price Expectation Survey, which surveyed over 100 economists, real estate experts, and investment & market strategists.

Their projections are aggregated in the graph below. Notice how much equity you could acquire over the years, should you buy a home this January:

Not bad, right? That’s only six years away, which goes by in the blink of an eye. You could have nearly $55K in equity, and that’s not even considering market movements that could potentially add even more value.

Inspired? Great, let’s talk about how to buy a home this winter!

Take everything you think you know about buying or selling a home in the winter and put it aside. If 2020 taught us anything, it’s that the housing market held firm with low-interest rates and stable home prices. These positive trends are still with us.

We’re so confident in the state of the housing market that we’ve updated our guides for buying and selling homes in the winter. These are free resources that empower you with all you need to know about making smart moves this winter. They’ve been updated to reflect the unique conditions we find ourselves in. Even better, they can be downloaded to refer to when you need them. 

CLICK HERE to download our free guides on buying and selling this winter. And of course, we are here to personally answer any questions you may have.

Interest rates are low right now, but they won’t be forever

If we had a dollar for every time interest rates were mentioned, we’d never need home equity!

The federal government introduced economic initiatives to mitigate the economic fallout from the pandemic, which helped to drive interest rates down. This produced huge opportunities for homeowners to refinance. It also created hordes of new buyers who encountered low home inventory, which kept home prices stable.

When it comes to interest rates, there’s a lot in the mix. There’s also a real chance that rates will creep back up before we know it. This is why winter could be the time for you to make your move, either as a buyer or seller. It’s also time to consider refinancing if you haven’t already.

The bottom line is this: Contact us to discuss how to make these low rates work for you. Don’t get locked out of a once in a lifetime opportunity to save money, leverage your equity, or get a mortgage at an affordable rate.

Let’s raise a glass to those who are staying put!

Not everyone is entering the housing market this year. Maybe you’ve already refinanced to make staying in your “forever home” less burdensome. Perhaps you’re waiting to sell in five to ten years when it’s more convenient.

Whatever your reason, we recommend taking this time to make some home improvements that will protect your home investment value.

Check out these maintenance tips that will get your home ready for the market over the long run:

Quick to-dos inside your home

  • Expose the hidden dirt in your home. Under the couches, unused rooms, and even inside drawers and cabinets. These are just some of the places where dirt and dust build-up to create major cleaning headaches when you’re ready to sell.
  • Decluttering brings delight. Remember that traditional wooden trim on your baseboards? No? Well, it may be time to declutter and see your home again.
  • The holidays are over, so let your home breathe. Take down those lights and decorations, and be sure to clean up any debris as you go.
  • Your hardware has needs. A quick polish can make your cabinet and plumbing fixtures sing with their original glory.

Exterior maintenance checklist

  • Check for damage from snow, water, and storms. How is your basement holding up after heavy rain? Is the paint chipping on the side of the building after lots of snow? Also, don’t forget to use concrete-safe ice melt to protect your driveways and walkways.
  • Turn off any exterior pipes and faucets. The last thing you want is for the pipe connecting to your garden hose to burst in freezing temperatures, leaving you with a costly winter repair. Do a quick perimeter check of your home, shut off any pipes, and cover any openings or outlets. You’ll thank yourself in the spring.
  • Check gutters for icicles and debris. Ice is just frozen water that expands, which can be bad news for your home’s gutters. Once the weather gets warmer, you’ll need your gutters to send rainwater where it belongs—away from your house!
  • Got a pool? If so, then you should have tended to it by now. We know that the weather’s been warm, but double-check your covering, especially if you have an above-ground pool. Call a pool service if you’re concerned about freezing or weather-related complications. 

Interior maintenance checklist

  • Check for drafts. Any windows giving you the chills? Now could be a good time to seal them up or even replace them.
  • How’s the heat working? Do you have to turn up the heat and spend more money to get the same level of comfort? Depending on your system, it may be time to have an expert take a look.

All of these steps can safeguard your home for when you’re eventually ready to sell.

I’m hopeful about this year, and you should be, too.

After 2020, anything seems better. Sure, there will be some changes to the housing market, but let’s stay in touch and plan to crush your goals; we can make 2021 work for you in ways never before imagined.

We are staying up-to-the-minute on changing trends so that we can deliver you the best results in the year ahead. Whether you’re tired of renting, ready to buy, sell, or refinance your home, we are here with the expert insights you need to build wealth.

Let’s make this your year! We know that together, we can do it.

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