TEAM Metrowest
Berkshire Hathaway HomeServices Commonwealth Real Estate | 508.223.7583 |

Posted by TEAM Metrowest on 12/13/2017

Many new homeowners are eager to begin renovations on their home to make it fit the beautiful picture they have in their mind. Unfortunately the aesthetic improvements, while important, are often prioritized over important structural and functional repairs that should be made first.†The key to making smart financial decisions for renovating your home is to have a good budget and to stick to it. Home improvements are one of the few expenses that people often forget to budget for, alongside car repairs and emergency medical expenses. If done properly, however, a budget will help you prioritize your repairs so you'll spend your time and money wisely. In this article, we'll explain how to budget for home repairs in a way that works for you and your family.

Understanding your†money

To budget for home improvements, you first need to budget for other things in your life. Use an app or website like Mint or You Need a Budget†to get a better understanding of how you spend your money. For some, budgeting for home improvements may mean cutting back on other spending areas. Fortunately, these apps break down all of your purchases by categories and help you spend less each month.

Ranking your renovations

If you're dying to update the†bathroom but the†roof†needs to be redone, you should call the roofers first.†Some home improvements are a ticking time bomb: deteriorating roofs, poor†insulation, HVAC issues, water damage, and safety concerns like fire hazards†are all problems that need to be addressed first on your budget. Some will save you money, others could save your life, but all of them are more important than adding closet space in your bathroom.

Estimating costs

Do your research when it comes to the the cost of repairs and home improvements. Once you have a ballpark figure, add it into your budgeting app as a new item on your budget. There is a general rule, when budgeting for home repairs, that you should set aside 1% of the cost of your home for maintenance and repairs each year. However, there are many other factors involved in how much it will cost to upkeep your home like the age of the house, the weather in your area, and how well-maintained the home was before you bought it.

Sticking to your budget

Everyone starts with good intentions, but keeping a budget isn't easy. Thankfully, it has been made much more manageable with the help of apps and websites that link right to your bank accounts. To stick to your home repair budget, make sure you sign up for reminders on your spending and progress. If you're keeping a budget the old fashioned way (pen and paper), put reminders on your calendar each month to check if you're spending too much on home repairs. Another key to successful budgeting it to make sure everyone in the house is on the same page. If your significant other plays a role in home repairs, go over your budget together. This will help you keep one another accountable and set priorities that work for everyone.

Posted by TEAM Metrowest on 11/8/2017

Mortgages werenít the only financial instruments that helped to cause the Great Recession. Home equity loans also played a role in the massive economic decline. Lenders and homeowners both had a hand in creating the volatile situation. Both also bore a huge brunt of the fallout.

So, why are home equity loans again on the rise?

What makes home equity loans so attractive?

Home equity loans put hundreds, at times thousands, of dollars within a homeownerís reach.Although interest rates are rising, they continue to be low in most areas. Get a home equity loan while rates are low and youíll yield short and long term savings on the repayment side of the loan.

Another reason why more homeowners are getting home equity loans is because having the money to upgrade, repair or renovate a house can be a significant plus,especially if homeowners use home equity loans wisely. Upgrades, repairs and renovations add value to a house, another area that homeowners learned not to leave to chance during the Great Recession.

Using home equity loans to strengthen your real estate investment

Yet, itís easy to get into trouble with home equity loans. To stay out of trouble with home equity loans:

  • Only borrow as much as you can afford to repay on time. Donít assume that you will be able to repay the loan. Create a budget and list out all of your expenses, including money that you spend on entertainment.
  • Consider using investment accounts like IRAs and 401(k)s to grow wealth and not solely your home. This could keep you from viewing your home as your sole source of long-term wealth.
  • Get sufficient homeowners insurance. Donít just get enough insurance to cover the exterior or your home. Get enough insurance to cover your personal belongings as well.
  • Consider getting your home inspected and appraised before you pay for upgrades, as the upgrades that youíre thinking about getting may not increase the value of your home enough to make taking out a home equity loan good sense.
  • Despite what bank commercials may say, do not take out home equity loans to pay for vacations, cars or shopping sprees. This is a primary way that homeowners got in over their heads before the Great Recession.
  • Perform regular maintenance on your home. This includes cleaning out drainage pipes, changing filters and tightening and replacing screws, washers and bolts. By maintaining  your home, you can reduce the amount of a home equity loan you might need.
  • Adhere to manufacturer instructions when operating appliances. Doing so could extend the life of your appliances.
  • Care for the exterior of your home. For example,keep your lawn healthy, trim hedges and resurface your front walkway and driveway as needed.

Take out a home equity loan at the right time and the money could help to increase your overall wealth. View the loan as an investment in your home. Itís also important to approach a home equity loan as, just that, a loan. Remember that you have to pay the money back to the bank with interest, as a home equity loan is not a gift.

©2018 BHH Affiliates, LLC and Commonwealth Realty Group LLC. Commonwealth Realty Group LLC is an independently owned and operated franchisee of BHH Affiliates, LLC. Berkshire Hathaway HomeServices and the Berkshire Hathaway HomeServices symbol are registered service marks of HomeServices of America, Inc. The slogan Where You Deserve To Be is a service mark of Commonwealth Realty Group LLC. All rights reserved. © Equal Housing Opportunity