Personal Finance Ology

Everyone can relate to the constant search for the home they have created in their heads. Many of us can also relate to the effort and commitment it takes to finding that dream home. If I could offer a sound piece of advice it would be that a dream home is better created than located. The most important reason for this is the instant equity that’s added to your home once it’s enhanced to your liking.

I have found that a lot of my clients are pleased at the idea of finding the home of their dreams, however once they inhabit their new home their desires become more detailed and they see things they would like changed or added. After making this observation, I continue to look for houses most suited to their needs, but also those that can be “transformed” into exactly what they want.

Increasing the equity in your home is just as important as bargaining for a good selling price. The equity in your home becomes a concern when you are afforded the protection of becoming upside down in your mortgage simply by its presence. Other bonuses in focusing on your home equity are the opportunity to use it as a down payment on an investment property or use it to pay for unforeseen expenses that may arise in an untimely manner.

Purchasing a home that can be upgraded to your liking allows for an opportunity to gain a great deal on a house, as well as, create invaluable equity in the home. By initiating improvements to the home you are not only satisfying your appetite for your dream home but you are also creating a larger gap between the current value of your home and the balance of all financial obligations pertaining to the house. This created equity can be a nest egg that offers itself to other financial endeavors and is also instant money in the bank. As tempting as it may be to purchase a ready made home, there are advantages in purchasing a home that can be molded into our very own.

It is important to make wise additions to the home. It can be said that all improvements add equity to your home, however, there are a few that are more advantageous than others. For instance, it will offer more value to your home to focus on the kitchen by upgrading the appliances or installing tile showers in the bathrooms rather than the addition of a pool or Jacuzzi. While the value of a luxury pool and Jacuzzi doesn’t offer much addition to equity the outside venture of repainting or restaining a porch or deck is beneficial. Another great equity builder would be to upgrade the bedroom closets. These ventures solidify an increase in equity, as well as, our satisfaction with our purchase.

Home equity is often overlooked as many tend to focus primarily on paying off the debt induced by purchasing their home. However, there is importance and great value in creating equity and constantly finding new ways in gaining higher equity in our homes. Home improvements are one way of making our home work for us by gaining profit. Some other ways of building additional equity in our homes would be a higher initial down payment, extra principle payments and shorter mortgage terms.

Simply put, the increasing of equity in our home is one of the easiest and most successful paths to wealth that is available. It’s almost too easy! The value of your home is rising due to your improvements. As you continue to lower your mortgage by making your payments your nest egg is growing. Almost instantly you have turned your dream home into an asset you can use for future purposeful activities that can afford you the pleasures of increasing your bank account.

Photo by: Concept to Creation

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