Blog with MAE Capital

Summertime Home Improvement- Fixing to Financing

July 22nd, 2019 12:05 PM by Gregg Mower

It is summer and the home improvement projects are heating up.   Weather you are replacing your kitchen or refinancing your home to a lower interest rate this summer seems to be the time to get these projects done.  The economy is doing great and you are pretty secure with your job, or jobs if you are a 2-income family.  With the economy strong and employment being as strong as it is you should feel comfortable with your financial situation.  You may have projects around the house that need your attention that you have been putting off due to finances or time.  It’s probably is not a better time to get started than now.  If you need to do major projects like a kitchen or bathrooms or even adding on to the square footage and you need money to do it, you probably have the equity in your house or the money your bank account to get this done now. 

If you have decided to remodel your existing home, you will not only be making your home more pleasant to live in, but you will be increasing the value of your home.  If you remodel your kitchen your home could go up 1.5 times the cost to remodel to remodel.  For example, if you pay $30,000 to remodel your kitchen your home would probably increase in value by $45,000 depending on your area, of course.  If you plan on selling after remodeling you will make your home more desirable and will sell on the upper end of the market.  This holds true with bathrooms as well. 

If you re-do you front yard this too will increase the value of your home as it would be more desirable to potential buyers as it is the first part of your home a buyer will see.  A fresh coat of paint makes the curb appeal greater as well.  The back yard is not as important to potential home buyers as it is the last thing people see when looking at homes.  Also, most home buyers will want to put their own personal touch on the backyard anyway.  So, if you are looking to do projects that increase value of your home do the back yard last.  But if you are living in your “Forever Home” a backyard remodel may be just what your family needs. 

Anything you do to your home to make your space more appealing to you is invaluable as this is where you live every day.  In this Real Estate Market know that the money you put into your home will probably stay in your home, at least for the next several years.  I see no major slow down in the Real Estate Market, as far as values goes, for the next several years.  Next Year is an election year and typically the Real Estate Market slows down in anticipation of the what the next administration will do to their employment situation.  I will not predict the outcome of this election, but whoever is elected you will have at least a year after they are elected to screw up the economy, or keep the same course of the current economy.  Whatever the outcome there are at least 2 years of a good Real Estate Market. 

In addition to a strong Real Estate Market Interest Rates have remained low.  So, if you need money to remodel your home now is the time to borrow the money to do it.  The neat thing about a remodel is that your home will generally increase by at least the cost of the remodel and in most cases the value will increase by even more than the cost of a remodel.   With interest rates as low as they are you might not even raise your monthly payment at all by borrowing the costs of the remodel.  How is that possible you ask?  If you bought your home originally with an FHA loan and have a 4.875% rate say 4 years ago the value of your home may have increased to the point where you do not require Mortgage Insurance so when you refinance today with a conventional Loan for say 4.125% with no mortgage insurance the additional money you took may actually keep the payment about the same as it was with your old loan. 

Remodeling your home or just doing simple improvements will not only make your home a better place for you to reside it will increase the value of your home.  Coupled with a low interest rate environment your home, if you were to sell it, would probably surprise you in how much it would sell for.  Or if you have no desire to sell but to make your place more livable for you and your family you will have peace of mind that every dollar you put into your home is still there in the equity of your home.  If you have questions or wish to see these numbers in action, we are here to help.  If you are simply looking to refinance to a lower interest rate, please give us a call we would love the opportunity to assist you.  One of our Loan Officers or Realtors can answer your questions today at or call at 916-672-6130



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