FEATURED REAL ESTATE ARTICLES
Use Your Equity to Make Home Improvements
With mortgage rates at all-time lows, it may be time to consider
looking into getting that addition put on your house, or finally
remodeling your kitchen or adding that additional bathroom.
Homeowners who want to begin major home improvement projects
may be able to finance those projects using the equity in their
homes. You can tap into your home equity or cash out by
refinancing your home for more than the balance that you owe
on your old mortgage. And because mortgage rates are so low,
you may be able to do it without a significant increase to
your monthly mortgage payment.
Letís say you want to add a small addition onto your home, and
the project is going to cost you a total of $20,000.00. If you
currently have a mortgage of $100,000 being financed over 30
years at eight percent interest, your monthly payment is
approximately $970 per month. If you refinance at 6.5% interest,
and add the $20,000 into your refinance, bringing your new
mortgage balance to $120,000, your monthly payment will only go
up approximately $25 per month. Better yet, if you refinance at
5.5%, your monthly payment will actually decrease.
If you have already had the addition added to your home, but you
paid with a credit card or another high-interest loan, you may
still want to look into refinancing. You can take the cash
proceeds from the refinance and pay off the high-interest loan
that you took out to build the addition. You will eliminate the
monthly payment for the high-interest loan and the interest
paid on the refinance may be tax deductible.
Even if you are planning on selling your home, that is even more
of a reason for you to take advantage of this opportunity. Some
home improvements will add more value to your home than the cost
of the improvement itself, bringing you a better price for the
home when you sell it. Certain remodeling projects like kitchen
redesigns and bathroom additions are examples of this, and they
make the home easier to sell.
Craig Romero is a mortgage analyst dedicated to helping homeowners maximize the investment in their homes. Visit his site to learn how to quickly build a minimum of $40,000 worth of home equity and pay your mortgage off in 10 years or less without making biweekly mortgage payments. http://www.wisemortgageinfo.com
Copyright 2004, Craig Romero