Sabrina Carr's Blog
The equity in your home plays a major role in how much profit you'll make off the sale, but it's not always simple to determine just how much of the home you own (even if you haven't refinanced). Here are a few tips to understand equity and how you can use it to your advantage.
What Is Home Equity?
The simplest definition is that home equity is the difference between the market value and your current loan amount. When calculating, you should also take into account related financing (e.g., home improvement loans, second mortgages, etc.). If you owe more on the home than you owe, you have negative home equity.
Of course, the number you generate is just an estimate. Just because your market value is listed at a certain price, doesn't mean that a buyer will offer that amount. Overall though, it's a good place to start. Once you have a baseline, it can give you a better idea of how your home sale will go and what you can afford once you move out.
The Bottom Line
Let's say you bought a home for $150,000 and you've paid off $50,000 total. If your home was recently assessed at $400,000, then your home equity is now $300,000, even though you only owe $100,000. The longer you've owned your home, the more you'll pay toward equity as opposed to interest.
But home sale profits aren't the same as home equity. You also have to deduct any expenses associated with selling the home, including staging, listing and real estate agent fees. This can take as much as 10% off the total sale price. Some lenders will charge a penalty fee for paying off the loan early, so you'll need to check your contract to understand your responsibilities.
Equity and the Home Sale
Experts recommend having at least 10% equity in a home if they're making a lateral move. So if you need to relocate for your job and you're planning to move into a similar home, then you'll need less than someone who's upgrading their lifestyle. If you want a bigger and more luxurious home, it helps to have at least 15% — and preferably more. The less equity you have, the more likely you'll end up with negative equity.
Equity can be confusing because you ultimately own the home while you're paying the mortgage payments. Your lender is simply using the value of the property as a type of collateral in case of default. You can think of equity as a form of leverage you can use to give you a little more confidence during the sale.
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If you recently bought a home, now may be an ideal time to look at internet services providers in your new city or town.
Ultimately, not all internet services providers are created equal, and you'll want to look closely at the options at your disposal.
To better understand how to find the right internet services provider, let's consider three best practices.
1. Evaluate the Services That You Need
Most homeowners demand fast, reliable internet services, but it is important to note that the needs of one homeowner may vary from the needs of another.
For example, a homeowner who works out of his or her residence may need the fastest internet services available. This homeowner likely will need internet services that deliver consistent latency and bandwidth to ensure he or she can stay on track with everyday work.
On the other hand, a homeowner who uses the internet to download movies, music and video games may require internet services that work great around the clock. That way, this homeowner can instantly download large files at any time.
Check out all of the internet services that a company has to offer. And when in doubt, speak with an internet services representative directly. This will enable you to learn about all of the internet services that are available and make an informed purchase decision.
2. Consider Your Budget
The costs of internet services may vary based on where you live. As such, you'll want to consider your monthly budget to guarantee that you don't stretch your finances too thin.
In many instances, internet services providers will offer discounts or rebates if you sign a multi-year agreement. This may prove to be an excellent option if you plan to live in your home for the next few years, as you'll be able to lock in your internet services pricing for a set amount of time.
Furthermore, many companies provide internet, TV and phone services. And if you bundle the aforementioned services, you may be able to receive discounted rates.
3. Examine Customer Reviews
What are current and past clients saying about an internet services provider? Evaluate customer reviews, and you can find out what it's like to work with a particular internet services provider.
You may be able to receive client reviews directly from an internet services provider. Or, if you conduct an online search, you should have no trouble evaluating feedback about a broad array of internet services providers in a particular city or town.
Lastly, if you need extra help as you evaluate internet services providers, you should consult with a real estate agent. In addition to helping you discover your dream home, a real estate agent can offer insights into internet services providers in various cities and towns. Then, you'll be able to make the best possible decision.
Take the next step to set up internet services at your new home – use the aforementioned best practices, and you can choose an internet services provider that will meet or surpass your expectations.