Desire Change in Your Life | Put your Home’s Equity to Work | Wilmington NC real estate

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IDLE EQUITY:

Put Your Home’s Equity To Work

With Six Savvy Strategies

Do you have idle equity sitting in your home that could be building wealth instead? One of the great aspects of homeownership is that you increase your wealth every month by building equity in your home and reducing your tax bill at the same time.

After you’ve been in your home a few years, you may have some equity that you could put to work for you. Even if the property has appreciated by just a few percentage points per year, significant equity can build up fairly quickly. Just be sure you retain enough equity that you’ll be able to pay a real estate agent’s commission when you sell the home.

Home equity loans are the most common means of tapping a home’s value. In states where home equity loans are not allowed, however, you can still put your home’s value to work by refinancing it for more than you currently owe–a “cash out” refinancing.

The first way most homeowners think of using their equity is to pay off high-interest debt. That’s one popular option, but you could also invest that equity in other ways. Here are six more ways to put your equity to work for you.

1. Trade Up

Using your equity as a down payment for a larger home could make financial sense. If you’re in a $200,000 home now and it appreciates by 5% each year, your gain is $10,000 for the first year. In five years, that home would be worth $255,256. But in a $275,000 home, that same 5% growth would be $13,750 for the first year. After five years, the more-expensive home would be worth $350,977 — nearly $100,000 more than the less-expensive home.

Of course, you may not be able to count on 5% appreciation every year. It could be higher or lower, depending on the state of the economy and market conditions. Not to worry, though. Even 2% appreciation will still add up over time.

Using additional equity to trade up will allow you to put a significant amount of money down on your next home. That could allow you to own a home you never could afford before.

2. Downsize

Another way to use your equity is to scale down. With the recent changes in tax laws, homeowners may sell a home every two years and walk away with tax-free profits up to $250,000 (for singles) and $500,000 (for married couples). By scaling down, you can purchase a smaller, less-expensive primary dwelling, and use the extra cash for investments, debt reduction or even purchasing an investment property.

3. Second Home

The real estate market has been fueled during the past few years by retiring baby boomers purchasing second homes. Maybe now is the time to purchase that home on the beach, at the lake or in the mountains. We can refer you to a knowledgeable agent in a resort area to help you with this move.

If you know you’re retiring to a particular area in the next few years, study that market now. You may want to buy the home now while prices are still affordable. If you do, you could rent the home during the peak vacation season. Many second homeowners discover they can just about cover their annual property expenses by renting out during peak season.

4. Investment Property

While the stock market often bounces up and down, many investors feel comfortable with the security of real estate. Not everyone has extra money to play the stock market profitably, but landlords can enjoy income every month. The secret is selecting the right property and finding expert property management if you don’t want to manage the property yourself. We can help with both these issues.

Some buyers have found it beneficial to purchase a property in the area where their college-age children are going to school. Their child can help manage the units and share the housing with other students to defray costs. The young adults learn responsibility and property management skills, and you have a live-in manager to watch over your investment.

5. Shared Equity

Another way to put your idle equity to work is to lend it to an adult child as a down payment for his or her first home. Some parents maintain a co-ownership interest while the young adult makes the mortgage payments. At the time of the sale, the equity is then split between the two. This is called a shared-equity arrangement.

6. Remodel

If you really like where you’re living, but desire a few more amenities, consider taking cash out for remodeling or adding to your current home. The interest paid on some home equity loans is tax deductible, just as it is with your first trust. Give us a call to find out what financing options suit your situation best.

Call us, we are the experts with expert partners in mortgage and everything real estate related. 800-497-7325-3607 or kaybaker@ec.rr.com . Sign up for our newsletters and our weekly TGIF Scoop on everything Wilmington NC!

 

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Get the Party Started | 64th Azalea Festival | Wilmington NC real estate

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The azaleas are blooming and the weather is perfect.  Please join us in celebrating the 64th Azalea Festival in Wilmington NC April 6-10, 2011.

” The mission of the North Carolina Azalea Festival is to be nationally recognized as a showcase for our community’s rich array of artwork, gardens, history and culture through recreational, educational and family-oriented events. The Festival encourages volunteerism and civic participation as it contributes to the region’s economy and promotes the unique qualities of Wilmington’s river-to-the-sea community.”

Sponsors and volunteers spend all year planning the weekend.  See the schedule here.

Categories: convention center wilmington, darius rucker

It’s Official Darius Rucker to Headline Wilmington NC 2011 Azalea Festival Concert

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Photo from DariusRucker.com

The party is getting started…. The 64th annual Azalea Festival will be held April 6- 10, 2011 in Wilmington NC.  Darius Rucker has been announced as the the headliner for the concert on April 6 at Trask Coliseum to open up the festivities.  Rucker was previously with Hootie and the Blowfish, before he set out on his own.  Deep voiced country music is what you will enjoy at the concert.  The other celebrities are Wilmington’s own  Tampa Bay Buccaneers place kicker and John T. Hoggard High School graduate Connor Barth; Miss North Carolina 2010 Adrienne Leigh Core; Emmy Award-winning actress and soap opera star Leann Hunley, who played the cougar-ish Tamara Jacobs on filmed-in-Wilmington TV series “Dawson’s Creek”; USS Gravely Commander Douglas Kunzman, making his second festival appearance; and Chris Lambton, who appeared on the ABC reality show “The Bachelorette.” The Avett Brothers are headlining a concert on April 8, and that show is sold out.

To listen to a hit “Come Back” song from Darius, click here.

The Azalea Festival is one of the biggest festivals in Wilmington NC and has for 64 years drawn many celebrities including headmaster Ronald Reagan.  Please join us in a great tradition.  Tickets for the concert are avaliable starting Saturday Feb. 12 at http://www.ncazaleafestival.org

While you are in town text 14059 to 44133 to search Wilmington NC real estate, or visit www.cbbaker.com.

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Copyright © 2017 Wilmington NC Real Estate Guide. All rights reserved. Disclaimer: All content on this blog is my own opinion and should not be treated as fact or relied upon when purchasing or selling real estate.