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MrC_NL_AUGUST_ALLMODULES_AUGUST14 (1) Flipbook PDF
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Is It the Right Time to Tap Into Your Home’s Equity? Your home’s equity can be a powerful tool if used wisely. By taking advantage of a cash-out refinance, you may be able to open up new possibilities and get access to a large chunk of cash. There are some risks involved, but if you weigh them with the right knowledge you can turn your equity into a new opportunity. In that spirit, let’s talk about what a cash-out refinance is, how you can use it, and why it may be a solid choice for your future.
What is Cash-Out Refinance? With a cash-out refinance, you’re replacing your home’s existing mortgage with a new home loan for more than you currently owe. In other words, you’re borrowing cash based on the value of your home. For example, if Bill owes $200,000 on a home valued at $300,000, he may be able to refinance
HOMEOWNER MONTHLY NEWSLETTER August
THIS MONTH’S TOPICS PAGE 1 Is It the Right Time to Tap Into Your Home's Equity? PAGE 3 The 5 Most Valuable DIY Home Renovations PAGE 4 An Everyday Guide to Homeowners Insurance PAGE 5 In Defense of Real Estate Agents
continued on next page 1 Nationstar Mortgage LLC d/b/a Mr. Cooper, 8950 Cypress Waters Boulevard, Dallas, TX 75019, NMLS #2119
at a $240,000 loan and receive up to $40,000 in cash (the amount of equity one can cash out will vary depending on the property state and loan type; example doesn’t take into account closing costs).
How Can it Help Me Achieve My Goals? A cash-out refinance may be a great idea for a few reasons. First, there’s a chance your new mortgage may have a lower interest rate. Second, it’s a great way to get access to a large amount of cash at once. Here are just a few ideas for how to use that cash: Home Renovations: One of the most popular uses for a cash-out refinance is to improve your home, both for quality of life and to increase its overall value. This can include bathroom and kitchen remodels, additions, and more. However, it’s important to prioritize renovations that will add value to your home and increase your equity further. Emergency Expenses: There’s no better investment than your family’s security and a cash-out refinance is a great way to bolster your bank account quickly, especially in uncertain financial times. Most experts
recommend three to six months of living expenses set aside, but the specific number is completely dependent on your living situation. Other expenses: There are countless other uses for a cash-out refinance, including college tuition, debt consolidation, and long-term investments. Regardless of the use, it’s important to ensure the interest rate on your mortgage is lower than the interest you’d be paying on the investment you’ll be using the cash for.
What are the Risks? With a cash-out refinance, you’re borrowing against the value of your home. In the event of a market crash, you could end up owing more than your home is worth. Also, there are closing costs for a cashout refinance, which ranges from 2% to 5% of the mortgage. Overall, it’s important to use a cash-out refinance for something that will have a return, unlike new cars or family vacations. If used correctly, however, a cash-out refinance can be a powerful tool for your family’s future.
*A debt consolidation refinance increases your mortgage debt, reduces equity, and extends the term on shorter-term debt and secures such debts with your home. The relative benefits you receive from debt consolidation will vary depending on your individual circumstances. You should consider that a debt consolidation loan may increase the total number of monthly payments and the total amount paid over the term of the loan. To enjoy the benefits of a debt consolidation loan, you should not carry new credit card or high interest rate debt. A cash-out refinance increases your mortgage debt and reduces the equity you may have in your home. Your monthly mortgage payments may be higher.
See How Much Equity You Can Turn Into Cash. Talk to a cash-out expert today.
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A cash‐out refinance increases your mortgage debt and reduces the equity you may have in your home. Your monthly mortgage payments may be higher.
2 Nationstar Mortgage LLC d/b/a Mr. Cooper, 8950 Cypress Waters Boulevard, Dallas, TX 75019, NMLS #2119
The 5 Most Valuable DIY Home Renovations One of the most valuable tools for a homeowner is ingenuity. If you consider yourself handy (or are willing to learn), then that “sweat equity” can pay off big in the value of your home. Renovations are a great way to do it, and DIY renovations are even better. You can save on construction costs, work on your own schedule, and get the satisfaction of a job well done.
Here are 5 DIY renovations that can quickly add value to your home. 1 Kitchen Facelift While major renovations are best left to the professionals, there are some great ways to add value to your kitchen on your own. Tiling, for example, is a great way to add a modern look by refreshing the floors, backsplash, or even countertops. You can also repaint, install new appliances, or even add a bar to an existing countertop.
5 Landscaping Your home’s landscaping is its first impression for most people. The work you’ve done can give a glimpse into the home’s upkeep and value without even anyone needing to step in the door. And, the sky’s the limit. You can add bushes, accent flowers, or even go as far as retaining walls or new trees. It’s a low-risk, highreturn project—and who knows, it may even be fun.
2 New Garage Door A garage door is one of the simplest and most valuable renovations you can make. As a prominent feature on the outside of a home, it will be immediately noticeable to new buyers and can be installed on your own with just a moderate amount of knowledge and tools.
These are just a few of the DIY opportunities that can add value to your home. We recommend leaving things like electrical work, plumbing, and more intricate jobs to the professionals. But, with the right project and some elbow grease, you can transform your home and increase your equity in the process.
3 Fresh coat of paint While painting the outside of your home is quite the undertaking, interior paint jobs can be done fairly easily and add immediate value in many cases. In fact, a Zillow study* showed that homes with a kitchen painted in blue-gray sold on average for $1,800 more than others. A blue front door added $1,500. That’s a pretty good return on a few buckets of paint. 4 Entertaining Space A patio or deck may be the perfect choice to add value to your home. While hiring someone to build an entertaining space can add up quickly, you can save quite a bit by building it yourself. You can pick and choose the best deck/patio plan that meets your needs and construction experience. Plus, you’ll finally have an excuse to buy that grill you’ve always wanted. *Source: https://www.zillow.com/blog/blue-kitchens-sell-formore-216631/)
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An Everyday Guide to Homeowners Insurance Nothing says “complicated” quite like insurance. For most people, they think about mounds of paperwork, deductibles, principals, and fine print. But, it’s essential to get a basic understanding— particularly for homeowners—and that’s what we’re going to help you do. Homeowners insurance can be a make-or-break moment for your family if disaster should strike, so it’s important to know what it is, how it works, and what it protects you from.
What is Homeowners Insurance?
Just like any other kind of insurance, homeowners insurance is a protection you can choose in case of an unlikely event. By paying into a plan, you can help protect your home against damage, liability, and more. You’ll most likely be required to meet a deductible for any repairs or rebuilding costs associated with a claim. And, while homeowners insurance is not required by law, it is required by most mortgage lenders if you take out a home loan.
What is Covered?
In this case, we’ll talk about the HO-3 policy, which covers about 80% of all homeowners insurance in the United States. HO-2 and HO-1 properties are bare-bones, cheaper, and are far less common. HO-3 insurance covers physical damage to your property caused by fire, lightning, smoke, windstorms, hail, snow, ice, explosions, riots, vandalism, theft, and more. It also covers personal property and additional structures, as well as liability and medical expenses in case someone is injured on your property.
to be sure you have an insurance plan that will protect you if your home is a total loss. The best form of homeowners insurance is the kind that gives you peace of mind. Be sure to talk to multiple insurers to compare plans and select the one that makes sense for you, your family, and your home.
What's Not Covered?
In most cases, homeowners insurance does not cover flooding (including flooding caused by sewers and drains), earthquakes, landslides, infestations, wear and tear, government action, and power failure. If you live in an area particularly prone to these incidences, you can find insurance outside of your typical homeowners insurance. For example, flood insurance is usually required in coastal areas and floodplains.
What Do I Need To Pick a Plan?
It’s important to talk to your insurer about your home and your living expenses to determine the best plan. They can offer coverages with a deductible that fits your budget. That being said, it’s important to consider the overall cost of rebuilding your home and to purchase a plan accordingly. As the worst-case scenario, you want
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4 Nationstar Mortgage LLC d/b/a Mr. Cooper, 8950 Cypress Waters Boulevard, Dallas, TX 75019, NMLS #2119
Matic Insurance Services, Inc. Phone # (877) 556-6116 CA License No. 0192444
In Defense of Real Estate Agents
In an increasingly DIY world, it can be easy to think you don’t need a real estate agent when buying or selling your home. But, a good real estate agent is worth their weight in gold—and they’re far more than paper pushers. While knowledge of local laws, regulations, and real estate paperwork is important, here are four often overlooked reasons for hiring a real estate agent.
Negotiating Power
Particularly if you’re selling a home, real estate agents don’t come cheap. Generally, their commission is around 6% of the home’s sale price. But, according to The Balance, for-sale-by-owner properties sold for 30% less on average than agent-represented properties*. This is for two reasons. First, a higher selling price means a higher paycheck for the agent, so they’re motivated to sell your home at the highest price possible. Second, and most importantly, they’re trained in negotiations. They know the fair market price, they know what a good offer looks like, and they can use that knowledge to help a seller get top-dollar for their home.
Local Knowledge
Since the agent’s commission is typically covered by the seller, there’s really no good reason not to use an agent if you’re in the market to buy. There’s really no cost, and you’re reaping the reward of their knowledge. Beyond having access to the MLS (Multiple Listing Service), a good agent has intimate knowledge of the area they serve. Their knowledge can be invaluable to you as a buyer, especially if you’re moving to a new area. An experienced agent knows neighborhood trends, up-and-coming areas, and the general “gut-reaction” response to a property that may or may not be a good fit for you. That only comes with an intimate knowledge of a region.
Decision-Making
The home-buying or selling process is inherently an emotional one. A real estate agent is key because they’re not emotionally attached to your property or the home you’re looking to buy. If you’re a seller, you may be tempted to reject a solid offer because you “feel” the home deserves more. Or, if you’re a buyer, you may be tempted to pay more than what’s fair because you fell in love with the “perfect” mid-century fixer upper. Ultimately, the decision is yours. But, an agent can give you objective input to help you make it an informed one.
Marketing Masters
Maybe the most underappreciated skill of a good real estate agent is their marketing skills. If you’re selling a home, they know what buyers will want to see. They can coordinate photoshoots, run advertising campaigns on social media, and use all the right words to get people walking in the door to make competitive offers. Some home sellers and buyers have a lot of luck with the DIY approach. But, if you take the time to find a reputable and experienced real estate agency, you’ll be sure to reap the benefits. *Source: https://www.thebalance.com/top-reasons-to-hire-arealestate-agent-1798906
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Mr. Cooper Real Estate Rewards is offered by Xome. Inc., an affiliate of Mr. Cooper. Referrals to Xome may provide a financial benefit to Mr. Cooper. You are not required to use a real estate agent on the Xome panel as a condition of receiving a loan from Mr. Cooper, and such use will have no impact on any loan application to Mr. Cooper. This is an advertisement and not intended as a solicitation for agent representation if your property is currently listed with an agent. Visit Xome's licensing page https://www.xome.com/auctions/licensing. Xome Inc. & Xome CT LLC [Davis E. Owen, Sr.‐Broker] (for CT properties] & Xome PR LLC (for PR properties), 750 Hwy 121 BYP, Suite 100, Lewisville, TX 75067. Mr. Cooper Real Estate Rewards is a service mark of Nationstar Mortgage LLC.
Nationstar Mortgage LLC d/b/a Mr. Cooper, 8950 Cypress Waters Boulevard, Dallas, TX 75019, NMLS #2119
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