Negative equity seems to be declining nationwide. About 43 million homeowners now have positive equity while about 6.5 million are still negative equity. Homeowners equity rose by $2.1 trillion last year to $10 trillion. Positive equity makes it easier for homeowners to refinance and to sell their properties. California leads the pack with about 12.5% still underwater (13.3% nationwide) while Nevada tops the chart with 30.4% still underwater. Equity of less than 20% is considered "under-equitied" which is still better than negative equity but not as good as 20% equity. Call us if you in the "Under-Equtied" category for refinancing programs available for you. However, there is a flip side to the story. Homeowners are frustrated due to their inability to tap their home equity. Despite low interest rates, it's become harder to borrow. Banks are requiring pristine credit since the great recession of 2008. Banks must now hold more money in reserve for each home-equity credit line they extend. So home-equity lines have become a less attractive business for banks than loans that require lower reserves. Fannie Mae and Freddie Mac can now send home loans that default back to the banks that provided them inflicting losses on the banks. Fannie and Freddie also view cash-out refinancing as riskier now and have imposed higher fees to guarantee them. This makes such loans costlier for banks and consumers. Banks are increasingly focusing on the most credit worthy borrowers requiring an average credit score of 780 to get a home equity loan (barely 30% of households have scores that high).
a) An Updated Kitchen. An updated kitchen such as newer appliances, granite counters, stainless steel appliances, convection ovens, professional ranges, and high-quality floorings, such as wood, laminate, tile or stone. cabinetery must also be in good condition.
b) Modern Bathrooms. A big asset is a spa or whirlpool tub or master baths that give a little room to roam. Separate showers with steam or multiple jets, a dole sink and a separate room for the toilet.c) A Master Suite. A luxurious bathroom, lounging areas and walk-in closets. Fireplace, feeling of privacy.d) Natural Materials. In floor coverings especially bathrooms or kitchens, look for ceramic tile or wood rather than linoleum which can tear.e) Landscaping. Water features (yes even in Seattle), gardens, and mature trees and shrubs.f) Storage. Pull-down storage, rack systems and hidden storage off garage or bedroom areas.g) Smart home. Controlling lights and air conditioning with a phone to connection home security systems from work.
4 Things that can reduce a house's value.a) A pool.b) No garage or small garage.c) Garbled floor plan.d) Outmoded appliances or systems.
Small Budget Fixes
Things to consider before remodeling:
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