SayEducate

All those dire predictions for the housing market has plenty of consumers scared. Some people have refused to buy a house during this economy, waiting until things improve before wading back in. Others are seeing an opportunity to buy now and are reaping the benefits of that decision.

When it comes to predicting housing trends, much of the advice being offered isn’t always accurate. In fact, if you read some of the reports you’ll quickly notice a few problems regarding home values including:

Predictions are too generalized – Sure, foreclosures are way up in some areas but that doesn’t mean that every market reacts the same way. If there is an oversupply of homes, then prices will continue to drop while foreclosed homes in a tight housing market are likely to be snapped up quickly.

Local markets are too broad – Even within a metropolitan area, selling trends can vary considerably. One municipality could be struggling while another could be thriving — local conditions including schools, jobs, and amenities will often determine just how strong a housing market is. Even within a single municipality, one development could be very attractive while another one not so.

The types of housing vary in price — Condos could be losing value while houses could be stable or even rise in price in certain markets. A market’s average home value decline could be weighted because one type of housing is dropping in price, skewing numbers for that ranch or colonial considerably.

Forecasts are too long range — predicting the future is difficult even with a thorough trend analysis at your disposal. Variables including government intervention, supply & demand, and local job markets can change a market’s course almost overnight.

Although a housing predictor can offer some information of value, they aren’t perfect. You’d do better tracking local trends yourself and drawing your own conclusions based on your personal analysis.

If you recently lost your home to foreclosure, how long do you think it’ll take before you can become a homeowner again? 5 years? 7 years? Maybe even 10 years?

Many consumers believe that once they have lost a home to foreclosure, they won’t have the opportunity to purchase another home for many years. Thinking that their credit is trashed and that a foreclosure will be on their credit report for 7 or 10 years, perhaps longer, some people are under the impression that homeownership is off limits.

True, a foreclosure will be on your credit record for beyond the seven year period that most bankruptcies are listed. Yet, having a history of a foreclosure doesn’t have to stop you from buying another home. Moreover, you could find yourself in another home a few months post foreclosure.

Most conventional lenders will not consider lending you money for a home quickly, for the simple reason that if you lost a home recently, then you could lose your home again. But there are factors which might be taken into consideration by the lender:

• You lost the home due to divorce, an illness, loss of job, or some other valid reason.

• You have the cash on hand to put at least 20% down on the home you want to purchase.

• You are willing to pay a higher interest rate, perhaps as much as 2% over the current rate offered to their best borrowers. Along with the bigger down payment and possibly including some points, a lender may decide that you are a risk worth taking.

Loans and loan rates are always determined based on risk factors. If a lender believes that you are worth the risk and you can put down a large amount of cash, then you could be considered for a loan.

Granted, you’ll pay tens of thousands of dollars more interest payments with a higher risk loan, but you can always refinance later especially as your credit improves and a lower rate is offered to you.

Home ownership post foreclosure isn’t a given, but it isn’t impossible either. You must demonstrate to a lender that you are worth the risk and hope that they can see past the problems which caused you to lose your home in the first place.

Resources

Bank Home Equity Program

Credit Management Center

Home Equity Calculators

Many homes are built with unfinished basements as this is the one area of the home least used by homeowners throughout the course of the day. Even the lowly garage, if not used to house vehicles, is often the place where stuff is stored. Basements are rarely considered to be an area where homeowners plan to spend much of their time.

Basements do have a purpose that some people fail to consider — if finished off, this room can add value to a home perhaps far more value than it would have had it remained unfinished. A finished basement can be used as a recreation room, as a play room for children, even used as a den. What a finished basement does do is add equity to a home.

Most home improvement projects can be get quite complicated, even expensive, but with a basement finishing project, the amount of work that needs to be done isn’t always that involved. Certainly, if you desire walls or partitioned areas then that will add to the cost of the project. Some basements aren’t tall enough to put in dropped ceilings, but for those which have the room, this isn’t an expensive job.

If your basement has some problems with water, you’ll want to coat the walls with water resistant paint. While you’re at it, head to the outside to make sure that the soil slopes away from the house and that the drainage is good. You may have to add in drain pipe extenders to help move water away from the house.

Heading back inside, consider using tiling for the flooring. Most kitchen style tiles will do, but if you elect to go with a raised floor, you’ll pay quite a bit more money. Add in wall to wall carpeting and your small project has mushroomed into a full-fledged home improvement job.

Likely, all of your electrical and plumbing hook ups are already in place, but be prepared to run some lines or piping in the event you need to heat, cool, or light a certain area. You want the room to remain as dry as possible so consider having a dehumidifier on stand by, ready to kick in as needed.

Once you have your plans established, you can tackle this job over several weekends or take a week off from work to get everything done. When completed you’ll have a room that everyone will love and that finished basement will add to the value of your home.

Resources

Home Equity Lending

Managing Bank Equity