Eric Mitchell Real Estate

The Importance of Home Equity If you’ve owned a home for several years and made responsible financial decisions, you may have built a significant amount of equity. Home equity is the difference between the current market value of your house and the amount you still owe on the mortgage. If the value is greater than the debt, you have positive equity that can be used to finance other goals. How Does Equity Change Over Time? There are two ways to increase the amount of equity in your home. First, you can pay down the principal on the mortgage and make improvements that will increase the value of the house. As the ratio of the amount of the house you own outright to the amount of debt increases, equity grows. It takes years to build equity. One reason for this is that mortgages tend to charge more interest at the beginning of the repayment period, which means a relatively small amount of each payment is applied to the principal. Later in the repayment period, a higher percenta...

How to Find the Down Payment for Your First Home If you’re in the market for buying your first home, chances are you have some money saved but you might be worrying a bit about having enough for the down payment. This is especially true for millennials just a few years into the workforce who probably are just learning why their parents always told them to save some of their paycheck each week. Sure, the prospect of saving enough might be difficult to digest when you’re eager to get house hunting, which is why sometimes it makes sense to explore some other means to get the money. Below are some helpful hints to find the down payment you need. Family: Deep down you might be too proud to ask your parents for a handout, but that’s probably the easiest way for you to get the money you need. And many parents probably had a similar experience when they were first starting out and looking for money. Arrange a loan with interest (if your parents insist!) and be prepared to invi...

Get to Know the Language of Lenders If you’re buying a house or condo, chances are you are going to need a mortgage, as having total cash on hand is rare. Most people know you should shop around for a strong rate and lender before agreeing to terms, but many don’t realize the different people involved. By understanding the lender community, you can get financing that makes the most sense for you. Here are some terms you should know: Mortgage Lenders:  This is probably what you immediately think of when you first hear talk of mortgages. Mortgage lenders are the ones that will provide the money you need to buy your home. Simply fill out some information on your financial background, and you’ll see what sort of mortgage interest rate you are eligible for. Mortgage Brokers:  Brokers don’t actually make loans, but they do deal with multiple lenders. You’re still utilizing a lender for the money, but the broker will help you find the one that will offer you the best...

What Is a Negotiated Debt Settlement? If you’re buried by credit card debt, a negotiated debt settlement with your creditor may be worth checking into. Negotiated debt settlement is a general term for discharging debt in a way that appeals to the credit card holder and the card’s issuer. It’s best to negotiate from a position of strength by not having submitted late payments or having missed them, which can cause a credit score to fall. If that happens, cardholders will likely have a harder time getting concessions in a negotiated debt settlement. Instead, they should start talking to their creditor soon after realizing they’re having trouble repaying their debts. -Forbearance There are a few types of negotiated debt settlements, and the simplest one is called forbearance. Banks offer these programs to reduce interest rates, waive late fees and extend repayment terms. Forbearance doesn’t forgive any debt, but offers better terms for repayment. Unemployed cardholders ty...

3 Hot Spots for Your Next Vacation Home For many people, buying a vacation home in a favored location makes perfect sense. You get to spend your holidays with family and friends in a homey, laid-back location and, if you’re willing to rent it on a short-term basis, you can rake in some rental income besides. It’s a great strategy that can yield tax benefits depending on how many days you spend in your second home and how many days you rent it out—and, in most cases, there’s a fair return on your investment should you decide to sell. As with all investments, there’s an element of risk, but where you buy is a critical factor. Buying a second home in a luxury community is a good option if you want the safety and security of gated living, luxury amenities such as on-site spas and golfing, and a higher than average return on investment. But a report by Mashvisor, a provider of real estate investment data analysis, looks at three of the top hot spots for 2019 based on reasonab...

Buying Your First Home? Simple Tips to Keep the Process Running Smoothly While buying your first home can be nerve-racking, paying attention to the following items will go a long way toward putting your mind at ease as you make your way through the process.   Get your finances in check.  Just because you have money in the bank doesn’t mean you will qualify for a mortgage. Meet with a financial advisor and get a handle on what you can truly afford. If you want to do the numbers yourself, make sure to create a comprehensive list of every possible expense—loans, student debt, monthly expenses, etc.—and don’t rely on your lender to figure out a total for you. Lenders look at your debt-to-income ratio and not necessarily your day-to-day spending habits. Choose an agent.  Buying a new home will likely be one of the biggest decisions of your life, therefore, it’s important to take your time when choosing an agent. Not only do you want someone who is willing to c...

Dos and Don'ts of Starting a Home Remodel Whether you’re remodeling your bathroom, kitchen or whole house, proper planning is essential to project success. HomeAdvisor offers the following tips to help keep your remodeling project on track and avoid common mistakes: Don’t be impulsive. Do your research. It might be hard to imagine, but one of the biggest mistakes you can make is rushing headlong into a remodel without proper planning. You might be itching to get started, but beginning a project before you have every detail finalized could be a recipe for disaster. While the planning process varies, consider spending between one and two months planning your remodel. Don’t be blindsided by costs. Do stick to a budget. Going into a remodel without a clear spending limit will guarantee that you go over budget. HomeAdvisor’s True Cost Guide could help you get a better idea of how much you can expect your remodel to cost. Having your budget finalized before you meet with ...