How Much Home Equity Have You Gained? The Answer Might Surprise You

 
 

Have you ever stopped to think about how much wealth you’ve built up just from being a homeowner? As home values rise, so does your net worth. And, if you’ve been in your house for a few years (or longer), there’s a good chance you’re sitting on a pile of equity — maybe even more than you realize.

What Is Home Equity?

Home equity is the difference between what your house is worth and what you owe on your mortgage. For example, if your house is worth $500,000 and you still owe $200,000 on your home loan, you have $300,000 in equity. It’s essentially the wealth you’ve built through homeownership. Right now, homeowners across the country are seeing record amounts of equity.

According to Intercontinental Exchange (ICE), the average homeowner with a mortgage has $319,000 in home equity.

Why Have Homeowners Gained So Much Equity?

The rise in home equity over the years can be credited to two key factors:

1. Significant Home Price Growth

Home prices have climbed dramatically in recent years. In fact, according to the Federal Housing Finance Agency (FHFA), over the past five years, home prices nationwide have risen by 57.4%.

2. Longer Tenure in Homes

Data from the National Association of Realtors (NAR) shows people are staying in their homes for a decade. This increased tenure means homeowners benefit even more from home values growing over time. That’s because the longer someone has lived in their house, the more that home’s value has grown, which directly increases equity.

And if you’re one of those people who’s been in their home for 10 years or more, know this – according to NAR:

“Over the past decade, the typical homeowner has accumulated $201,600 in wealth solely from price appreciation.”

The Benefits of Having Home Equity

What does that mean for you? It means your house might be your biggest financial asset — and it could open up some exciting opportunities for your future. Let’s break it down.

  • Moving to Your Next Home

Your equity could help you cover the down payment for your next home. In some cases, it might even mean you can buy your next house all cash.

  • Financing Home Improvements

Thinking about upgrading your kitchen, adding a home office, or tackling other projects? Your equity can provide the funds to make those improvements happen, increasing your home’s value and making it more enjoyable to live in too.

  • Getting a Business Going

If you’ve been dreaming about starting your own business, your equity could be the kickstart you need. Whether it’s for startup costs, equipment, or marketing, leveraging your home’s value can help bring your entrepreneurial goals to life.

Bottom Line

Whether you’re thinking about selling, upgrading, or simply want to understand your options, your home equity is a powerful resource. If you’re wondering how much equity you’ve built or how you can use it to meet your goals, connect with a local real estate agent to explore the possibilities.

Read more at Keeping Current Matters

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How to prepare your home for a freeze – 7 things to check and put in place now before deep winter weather hits

 
 

It's normal for snow and ice to be a nuisance in winter, but bigger, more serious freezes can result in being trapped in your home, potentially with vital services cut out and supplies low.

Expert contractors say prepping your house for a big freeze is a vital task to carry out now, especially if you live somewhere that was hit badly last year. Their seven tips include insulating pipes and tanks, as well as stocking up on supplies and checking your insurance policy.

Here, they break down the best ways to prepare a house for cold weather and harsh freezes so you and your property stay safe until spring.

How to prepare your home for a freeze

Preparing your home for an intense freeze goes beyond when to worry about pipes freezing. It often involves prep work to ensure you will have everything you need to stay safe and healthy should you be snowed in, the power goes out, or local stores are closed due to adverse weather.

1. Insulate pipes and tanks

Gordon Chalk, heating expert and owner of Next Level Underfloor Heating says, ‘One of the most important things to do when preparing for freezing temperatures is to insulate your pipes and water tanks. Un-insulated pipes are most prone to freezing which can cause bursts and water damage.’

Given that there will be few service engineers able to reach you should you be snowed in, this is essential to avoid and an easy fix now in milder weather.

Chalk adds, ‘I recommend using pipe insulation sleeves which are widely available and easy to install. Also, make sure to insulate or drain any outdoor faucets. Insulating your hot water tanks will keep the water warm and save you energy during the winter months.'

It pays to brush up on what to do if a pipe bursts, just in case your insulation fails, or the weather is more extreme than expected. This plan should include where to find your mains water shut off, and tools to help you dry out any affected areas.

2. Service your heating

Keeping a home warm all day will also be essential in a freeze. This not only keeps you safe and well, but limits damage to your property, too.

Gordon Chalk, heating expert, explains, ‘Don’t forget to service your heating system. Before the temperatures drop, have a professional inspect your boiler or heating system to make sure everything is working efficiently. A well-maintained system is less likely to fail during peak usage. Check your thermostat settings and replace any old or damaged filters to be efficient.'

This proactive approach will save you from emergency repairs when you need your heating most, and having it on your radar to complete means you will be able to find experts with availability. Leaving it too late can result in engineers and pros being out on emergency calls, meaning servicing and routine jobs get pushed down the list in terms of their availability.

How often you need to service HVAC system will depend on the age of your system and how often you use it. Generally speaking, older HVAC systems will need more frequent upkeep.

You might also want to brush up on heating your home when the power goes out, just in case.

3. Stock up on supplies

It never hurts to have a stock of essential items to keep in your ‘junk drawer’ to help prepare for a freeze or prepare your house for hurricane season.

Gordon Chalk, heating expert adds, ‘In addition to preparing your home structurally, you should also stock up on supplies to ride out a freeze. Essential items are batteries for flashlights, warm blankets, nonperishable food, and bottled water. In the event of a power outage, these supplies will keep you and your family safe and warm. A first aid kit [available at Amazon] is also important as well as any necessary medication.’

4. Run your faucets

The best time to drip faucets is before a big freeze to prevent issues, rather than try to treat them.

Hendrik Vandepoll, co-owner of Service Force Plumbing says, ‘Whilst some suggest dripping the furthest faucet from the main shutoff is enough, simply letting the faucet furthest from the main valve drip will not prevent a vulnerable faucet that is closed from freezing.

'That specific faucet needs to be open to allow moving water through the vulnerable branch of the supply pipe, and to allow pressure buildup to release through it as well.’

You should also cover outdoor faucets to prevent spigots from freezing and cracking through winter, too.

5. Check your insurance policy

When futureproofing your home against extreme weather it is a good idea to check over your insurance policy and write the phone numbers somewhere easy to find so you know what to expect in an emergency. Keep your policy number and the company's contact or claims number saved in your phone, and in your phonebook.

Russell Vent, VP at Paul Davis Restoration, says, ‘You will want to understand your insurance policy and what is and is not covered by your insurer. Do not enter a freeze event assuming that every type of damage will be covered.

‘Call your insurance company or agent and review coverage for some of the types of issues listed above and others. Make sure you are keeping your home heated properly and you can prove it. Some insurance companies will require proof from your energy supplier that your home was being heated properly before affording coverage of a claim.

‘Finally, make sure you are checking on the property regularly. A good rule of thumb is every two weeks but it is best to clarify that with your insurance company. Failure to monitor your property, in my experience, has also led to insurance claim denials.’

Check the terms and conditions carefully too as sometimes historic events may make future claims impossible. Understanding your policy and securing the correct coverage, even if it comes at a premium may later prove to be a game-changer should the worst happen. Many new policies have an exclusionary time frame so make sure to check taking out a new policy doesn't disqualify you from making a claim in the next number of days, weeks, or months.

6. Invest in a portable generator

Part of preparing for a freeze is preparing a home for a power cut. This will be the most dangerous part of a deep freeze – especially if your heating is run on electricity.

Russell Vent, VP at Paul Davis Restoration strongly recommends ‘having a portable generator handy and with enough fuel (but never place it indoors).’

Joel Worthington, President of Mr. Electric, a Neighborly company, adds, ‘Standby generators should be serviced before the start of the cold season. This will help ensure the generator is ready to handle any outages that may occur due to the deep freeze.

A generator that has been serviced should be able to function when needed the most. Generators can keep the critical systems of the home, like the HVAC unit or heaters, running, which can help prevent frozen pipes, water damage, and other costly repairs from happening.

7. Check your home insulation

Keeping a poorly insulated home warm is possible, but not recommended when in dangerously cold temperatures. Before a big freeze hits, consider having your home’s insulation bolstered, suggests Josh Rudin, owner of ASAP Restoration.

‘Your attic is a huge source of heat loss during the winter, but even more so during a deep freeze cycle. If you have enough time to prepare your attic with some additional insulation do so and reap the benefits of savings on your electric bill.

‘Additional insulation helps to keep the temperature that you set on the thermostat inside your home more constant. More insulation usually equals more heat retention as a general rule of thumb.’

Learn more about the types of attic insulation on offer to help you choose the right one for your home, and consider adding insulation to your garage door.

When a deep freeze hits, you might want to consider some other steps you might otherwise avoid during winter, such as leaving the heating on overnight to stay warm. It won’t help to cut energy bills, but it will ensure that you and your property are safe for the duration of the cold snap.

Read more at Homes & Gardens

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9 Bedroom Layout Mistakes That Could Be Ruining Your Sleep

 
 

Getting back on track after a poor night's sleep can be challenging. While fresh sheets, the right room temperature, and a calming color palette can make your bedtime routine more relaxing, there's one major factor you might not know could be impacting your sleep quality. The layout of a bedroom can have a major affect on your slumber. But here’s the good news: no matter the current state of your bedroom, you can make some simple tweaks to foster higher quality sleep.

To help you find the right bedroom layout, Laura Cerrano, CEO and Founder of Feng Shui Manhattan, is sharing her best tips on where to start. Ahead, she outlines the biggest bedroom layout mistakes you might be making, along with easy solutions to fix them.

1. A Poorly Positioned Bed

If your bed faces the wrong way (depending on the lineage of Feng Shui you follow), you may be disrupting your sleep unknowingly. "In general, a common modern-day Feng Shui recommendation is to arrange your bed in the commanding position—which gives you a clear vantage point of the bedroom entrance, with a solid wall behind your bed that offers support literally and metaphorically," Cerrano says. She explains that in biophilic design, this concept is related to having a sense of refuge. If this practice resonates with you, try analyzing your current bed position and adjusting for better Feng Shui.

Bonus tips: Always arrange your bed with at least two feet of clearance on each side for easy access. Don't position a bed directly under a window (to prevent drafts and glare at night), and ensure it doesn’t block any doorways.

2. Using Mirrors

Once you've fixed your bed position, assess any mirrors in your space. Since Feng Shui typically recommends against hanging mirrors in the bedroom altogether, Cerrano says you may want to consider relocating your mirrors into another space. "Mirrors are seen as pieces that activate the energy of a space," which can disrupt that idyllic bedroom theme of rest and rejuvenation, she says.

Can't do without a mirror in your space? Cerrano shares some tips to make it work. To start, she says to avoid placing your mirror(s) directly across from your bed, bathroom and bedroom doorway. Instead, strategically reposition your mirror in a spot that faces another wall with peaceful artwork or in a closet, especially if it's full length. But, "if you place a mirror inside your closet, you need to make sure the closet is organized," she warns, as this can also detract from a space's zen factor. And while there may be exceptions to this Feng Shui principle, Cerrano explains these guidelines serve as a solid base to work from.

3. Not Investing in Curtains

While it's ideal to allow natural light to filter into your bedroom during the day, Cerrano suggests black out curtains at night to help you maintain a healthy circadian rhythm and cultivate an ideal sleeping environment. Fine-tuning your artificial interior lighting plays a role too, so "[opt for] low-light bulbs that offer a soothing, relaxing feeling," she says. Typically bulbs with a temperature of 2,700-3,000K can be sufficiently bright and mellow. Next up: Check your shades or blinds. Cerrano suggests designs that point the light in a downward direction. "This is a subtle way of signaling to your brain, its time to relax and unwind," she says.

4. Hanging Off-Putting Artwork or Photos

Tapping into another Feng Shui method, Cerrano encourages selecting artwork that visually depicts the type of healthy relationship you envision for yourself. So avoid visuals of individual people, things, places, or themes that promote anger, or anything that has an overarching disruptive feel.

Cerrano also notes that images of family, children, or deceased loved ones can have a similar effect—shifting the focus to familial or past relationships, and disrupting the calm and romantic atmosphere a bedroom is meant to foster. "It’s important to honor yourself and your partner (if in a relationship), and intentionally establish a place you can retreat to after a long day, allowing your conscious and subconscious minds to rest," she says.

5. Not Letting Go of Clutter

Clutter can have the tendency to suck the life out of a space and many philosophies, including Feng Shui agree. "What ever you don’t need, use, or love—let it go," Cerrano says. "This act not only refreshes your home and self, it also becomes a ritual to symbolize new beginnings."

6. Choosing the Wrong Colors

For a restorative space, go easy with color in your bedroom. "Try not to choose overly strong colors within your bedroom," Cerrano says. Since the bedroom is a place for rest, choose your color scheme carefully. A very bold palette can create a chaotic environment for sleep while earth tones or soft, muted hues will naturally calm you. "Your bedroom is a space to support romance, relaxation and peaceful rest," Cerrano says, so picking the right colors is key if you want your space to live up to its relaxation potential.

7. Adding Too Much Tech

When finalizing your bedroom layout, be sure to always separate work from sleep. Since hybrid and work-from-home schedules are still popular, a bedroom may quickly become a makeshift home office (especially if you're limited on space or privacy). Still, "if you work within your bedroom, be sure to create a clear visual boundary to what area of your bedroom is reserved for work vs. sleep," Cerrano says.

And on a working note—which often isn't possible without a screen—Cerrano also encourages un-plugging from technology at least an hour before bed. Since blue light from digital items can interfere with your circadian rhythm, "if you do keep electronics within your bedroom, at least keep them as far away from your bed as you can," she adds.

8. Sticking to An Unbalanced Setup

Balance in materials and layout can yield an optimal bedroom layout. "In modern-day Feng Shui, for example, using two side tables is a metaphor of balance," Cerrano says. But if you don't have the space to arrange two side tables, try to aim for a layout that looks and feels harmonious, she suggests.

"In Feng Shui, it's also important to balance the principles of YinYang within the bedroom. Yin relates to soft textures and yang relates to hard textures. Soft textures could include your bed comforter, a plush area rug, and pillows," Cerrano says "Hard textures are usually the bedroom walls and floors. Seeing and feeling softer textures along the bottom of your feet and wrapped around your body as you snuggle in for bed promotes a feeling of rest and comfort, which is a great and easy way to support better sleep."

9. Storing Things Under the Bed

Since objects have the power to activate emotional memories, Cerrano recommends being selective about what you store in the bedroom. "If you do have storage beneath your bed, its a best to take inventory of what's there and remove any triggering items," she says. "Exceptions to this principle include the storage of linens and clothing, as they are usually neutral emotional items."

Read more at Better Homes & Gardens

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Here are 7 steps homeowners and renters should take after a wildfire, experts say

 
 

Firefighters are still working to contain the record-breaking fires that have been raging for more than a week in Southern California.

The fires in the Greater Los Angeles area have burned through 40,000 acres, destroying more than 12,300 structures, according to NBC News. About 88,000 L.A. residents are under evacuation orders and another 89,000 are in evacuation warning zones, meaning they may need to leave at a moment’s notice.

The insured losses from the early January wildfires may cost over $20 billion, according to estimates published last week by JPMorgan. Wells Fargo similarly estimated about $20 billion worth of insured losses with an approximate $60 billion economic loss.

As many affected residents are trying to figure out what’s next, one of the first things to do is kickstart the insurance process, according to Karl Susman, insurance broker and president of Susman Insurance Services in Los Angeles.

“Get your claim filed as quickly as you can,” he said. “You don’t have to have all of the information on hand.”

Insurers are likely to take a longer time than usual to process claims because of the influx of applications, he said, so the sooner you get the ball rolling, the better. 

If your primary residence has been affected by wildfire — whether you rent or own — experts advise taking these seven steps right away.

1. File the claim first, assess damage later

You don’t have to wait for firefighters to completely put out the fire to file an insurance claim.

Even if you’ve already evacuated and are unaware of the status of your home, you can still begin the claims process, Susman said.

Factors like the type and extent of the damage, the complexity of the claim and the volume of insured losses can affect the insurer’s processing time, experts say.

Renters have access to most of the same resources homeowners do, said Shannon Martin, a licensed insurance agent and analyst at Bankrate.com.

“For the most part, renters can follow the same process as homeowners,” she said. “You want to get yourself to safety, set up your insurance claim and then ask if you can get any additional living expenses in advance.”

2. Ask about ‘loss of use’ coverage

Ask your provider about “loss of use” coverage under your home insurance policy, said Jeremy Porter, head of climate implications research at First Street Foundation, an organization based in New York City that focuses on climate risk financial modeling.

The coverage would allow you to secure temporary housing or lodging while you’re out of your home, he said: “It’s there specifically to give people kind of a lifeline when they can’t move back into the dwelling.”

Tenants may have similar coverage — it’s generally known as Coverage D in renters insurance policies, Porter said. 

3. Keep your receipts and document everything

If you have loss of use coverage, make sure to keep every receipt for any clothes, food and temporary housing or hotel stays you may need. Also keep track of your activities and document all of your conversations with insurers, according to Douglas Heller, director of insurance at the Consumer Federation of America.

“The better you document what you are doing as you go through this awful time, the easier it will be to demonstrate your claim for reimbursements,” he said. 

4. Turn off your utilities

If the fire caused severe damage or you suffered a complete loss of your home, contact your utilities — such as electricity, water and trash collection companies — to temporarily shut off service. You may not have to pay for these services for the time being, Susman said.

5. Contact your auto insurer

If you lost a vehicle in the fire, the damage may be covered under your auto insurance policy, Susman said.

“It’s not going to be under your home [insurance policy] exactly, even if the car was in your driveway,” Susman said.

Look for what’s called comprehensive coverage under your auto insurance, he said. 

If you have comprehensive coverage on your car, you’re typically covered for wildfire loss, and “you just have to pay your deductible,” Bankrate’s Martin said.

6. Don’t forget property taxes

If your home suffered damages, or was a total loss, go to your county assessor’s website and type in your address.

If you’ve sustained more than $10,000 in damages, or the home is a total loss, you can file for an application to reduce or eliminate your property tax while the dwelling is under construction or uninhabitable, insurance expert Susman said.

“That’s something that people tend to not know or they overlook it,” he said.

7. Tap local aid opportunities

If you were not previously covered or your coverage was canceled before the disaster hit, keep an eye out for aid that may become available for those affected by the wildfires, Susman said. 

“For people that had zero insurance, [there will] probably be some type of assistance that will be available,” Susman said.

During a White House briefing, President Joe Biden announced a one-time payment of $770 through the Federal Emergency Management Agency is available for the wildfire victims. Nearly 6,000 survivors have registered for the aid and $5.1 million has gone out, according to The White House.

Those impacted can file for aid via DisasterAssistance.gov or FEMA’s hotline at 1-800-621-3362.

California’s Insurance Commission can be reached at 1-800-927-4357 to help individuals navigate the process as well as help uninsured victims.

FEMA is also providing assistance to those affected by the wildfires.

If you were not previously covered by an insurance plan, the agency’s Individuals and Households Program may provide funds for temporary housing.

Affected individuals can apply online at DisasterAssistance.gov or by calling 1-800-621-3362.

Seek out local support groups and workshops. The Insurance Commission of California will host its first workshop involving government representatives and insurers on Jan. 18-19 at Santa Monica College. Follow-up events are scheduled on Jan. 25- 26 at Pasadena College.

Some charities and nonprofits are actively accepting donations and are engaging in recovery efforts in the Pacific Palisades and surrounding areas.

Read more at CNBC

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What To Save for When Buying a Home

 
 

Knowing what to budget for when buying a home may feel intimidating — but it doesn’t have to be. By understanding the costs you may encounter upfront, you can take control of the process.

Here are just a few things experts say you should be thinking about as you plan ahead.

1. Down Payment

Saving for your down payment is likely top of mind. But how much do you really need? A common misconception is that you have to put down 20% of the purchase price. But that’s not necessarily the case. Unless it’s specified by your loan type or lender, you don’t have to. There are some home loan options that require as little as 3.5% or even 0% down. An article from The Mortgage Reports explains:

“The amount you need to put down will depend on a variety of factors, including the loan type and your financial goals. If you don’t have a large down payment saved up, don’t worry—there are plenty of options available . . .”

A trusted lender will go over the various loan types with you, any down payment requirements on those, and down payment assistance programs you may qualify for. The more you know ahead of time, the easier the process will be. And the key to getting the information you need is working with a pro to see what’ll work best for your situation.

2. Closing Costs

Make sure you also budget for closing costs, which are a collection of fees and payments made to the various parties involved in your transaction. Bankrate explains:

“Mortgage closing costs are the fees associated with buying a home that you must pay on closing day. Closing costs typically range from 2 to 5 percent of the total loan amount, and they include fees for the appraisal, title insurance and origination and underwriting of the loan.”

When it comes to closing costs, a trusted lender can guide you through specifics and answer any questions you may have. They can also give you a better idea of how much you should be prepared to pay so you can cruise through your closing with confidence.

And as you plan ahead for closing day, be sure to budget for your real estate agent’s professional service fee too, in case the seller doesn’t cover it. But don’t worry, you’ll work with your agent ahead of time to agree on what this is, so you won’t be surprised at the finish line.

3. Earnest Money Deposit

And if you want to cover all your bases, you can also consider saving for an earnest money deposit (EMD). According to Realtor.com, an EMD is typically between 1% and 2% of the total home price and is money you pay as a show of good faith when you make an offer on a house.

But, it’s not an added expense. Instead, it works like a credit and goes toward some of your upfront costs. You’re simply using some of the money you’ve already saved for your purchase to show the seller you’re committed and serious about buying their house. Realtor.com describes how it works as part of your sale:

It tells the real estate seller you’re in earnest as a buyer . . . Assuming that all goes well and the buyer’s good-faith offer is accepted by the seller, the earnest money funds go toward the down payment and closing costs. In effect, earnest money is just paying more of the down payment and closing costs upfront.”

Keep in mind, this isn’t required, and it doesn’t guarantee your offer will be accepted. It’s important to work with a real estate advisor to understand what’s best for your situation and any specific requirements in your local area. They’ll advise you on what moves you should make so you can make the best possible decisions throughout the buying process.

Bottom Line

The key to a successful homebuying savings strategy? Being informed about what you need to save for. Because, when you understand what to expect, you can plan ahead. With an expert agent and a trusted lender, you’ll have the information you need to move forward with confidence.

Read more at Keeping Current Matters

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