If you’re feeling the financial crunch right now, you’re not alone. Ever since inflation reached a record high of 9.1% this past summer (the highest it’s been in 40 years), life has started to feel pretty unaffordable.

Add the double-whammy of increased energy prices and the oncoming holiday season, and it’s gearing up to be an expensive end to 2022. And a wallet-busting new year as well.

It’s little wonder that everyone seems to be trying to save money in their home. So we spoke to home and energy experts across the country to get their insider tips for the best ways to save on basic living expenses each month. Here’s what they had to say.

Save on Monthly Home Costs With These 7 Hacks

1. Get a home energy audit

If you want to understand where your hard-earned dollars are going each month, one of the best things you can do is get an energy audit.

“Getting a home energy audit can help you identify energy efficiency upgrades you can make in your home,” says renewable energy expert Alan Duncan, of Solar Panels Network USA. “This can save you money on your energy bill in the long run.”

According to Energy.gov, making energy efficiency upgrades after an audit can save you anywhere between 5% and 30% on your monthly bill.

2. Winterize rooms you aren’t using

If you live in a big house (or even a normal-size one with a weird layout), then you might just consider winterizing any parts of the home you don’t plan on using—since this can save you some money when it comes to heating bills.

“I’m always surprised by how many people heat rooms or sections of their home that they never use or go into during colder months,” says Doug Greene of Signature Properties. “Be thoughtful about spaces like guest rooms where you can probably leave it unheated for longer durations.”

Set up a minimum temperature on your thermostat (to avoid freezing pipes), or add some extra insulation and opt to leave your heat off entirely in those unused spaces.

3. Lower your water heater temperature

Another unexpected way to save this winter? By lowering your water heater temperature.

“In hotter climates, air conditioning may be the biggest expense, and in colder ones, electric heating may come in first,” says Mark Dawson, president and CEO of Benjamin Franklin Plumbing. “But no matter what climate you live in, electric water heaters are likely to come in third for electricity consumption.”

All heat-producing electrical appliances use tons of electricity, but water heaters are especially busy because we use hot water throughout the day for bathing, dishes, laundry, and other needs.

To help lower your bill, Dawson recommends lowering the water heater thermostat to 120 degrees Fahrenheit to capture savings without sacrificing hot showers.

4. Put something in your toilet’s fill tank

Nope, this isn’t a prank. Adding a placeholder to your toilet’s water tank (like a full plastic water bottle) can save you a pretty penny each month.

“It’s no secret that every flush comes with a cost,” says Kerry Sherin, consumer advocate at Ownerly. “With less room in the tank, it will be filled with less water and save you on your water bill.”

The average water bill costs up to $115 per month. And the average person uses around 88 gallons per day—plenty of which comes from flushing, with each flush being equivalent to 1.5 gallons. So anything you can do to offset your water usage is sure to result in savings.

5. Invest in power strips

If you’ve never considered the hidden cost of the energy vampires living in your home, now’s the time to get them under control with a few power strips.

“A bad habit many people have is leaving appliances or electronics plugged in when they’re not in use—which are known as energy vampires,” says Sherrin. “A power strip can help you save because of how easy it is to switch multiple items off at once.”

Turning off your energy-sucking devices could save you several hundred dollars a year.

6. Keep your freezer full

This might sound counterintuitive, but keeping your freezer (and fridge) full can actually help immensely when it comes to its cooling efficiency.

“With more cool items in a fridge or refrigerator, there will be more cool air circulating,” explains Sherrin. “This means the appliance won’t have to work as hard to stay cold inside, therefore saving on electricity and saving you money.”

7. Insulate your attic

Speaking of unused heat, many homeowners end up paying even more on heating costs due to poor insulation. And since hot air rises, your attic could be the main culprit.

“Adding insulation to your attic is an easy, low-cost way to increase your home’s comfort in winter and summer and help cut your energy costs by as much as 20%,” says Elyse Inglese of CertainTeed, manufacturer of sustainable building materials. “Since different climates have varying insulation needs, I also recommend using an insulation calculator tool to determine what’s best for your region.”


For this and similar articles, please visit Realtor.com

If you’re looking to rent or buy a spacious apartment with few walls closing you in, loft living can be your ticket to happiness. As its “lofty” description suggests, these studio apartment buildings are characterized by their soaring ceilings, concrete or hardwood floors, and open, all-one-room floor plans.

Characteristics of a loft apartment

Loft apartments are typically converted factories or other industrial buildings, and often highlight this architectural history by leaving many of their raw features intact. These apartments often have exposed brick walls, high ceilings, visible piping and support beams, and wood or concrete floors. These features are actually a large part of the apartments’ charm.

“Converted loft apartments have more of a cool factor than a typical condo does,” says David Kean, a Realtor® in Beverly Hills who lived in a Los Angeles loft for seven years.

What Is a Loft Apartment? What to Know About Homes With Space to Spare

A brief history of loft apartments

Although there’s debate about when loft apartments originated—some say urban homesteaders converted industrial spaces to lofts as early as the 1940s—these wide-open studio apartments began finding their groove in the late 1960s and early 1970s in the SoHo district of New York City, at the time a wasteland of abandoned sweatshops and retired factories.

Metropolitan developers soon found highly profitable ways to turn all of that roomy space into living areas. Lofts were a way to upcycle old factories, industrial buildings, and commercial real estate into spacious apartments with a minimum of fuss and drywall.

The original spaces already had the infrastructure, from HVAC to plumbing and electrical systems, so converting them to lofts required minimal work. Typically a builder would add bathrooms and kitchens and spruce up the floors. Voila! You’re home—and free to choose which corner will be your bedroom and which area is just right for the living room.

Loft apartments first became most popular living spaces with artists and urban pioneers, and felt revolutionary—who needs a dining room, anyway? By the 1980s, this living style had caught on so much that developers began scooping up neglected warehouses and converting them as fast as the market would allow.

When the supply of factories dwindled, developers began constructing new buildings with open space apartments that they called “lofts” to impart a seductive cool factor among renters and buyers eager for a less traditional living style.

Today, a “hard” or “true” loft refers to a studio space created from an existing building, while “soft” or “loft-inspired” describes loft-style apartments created from new construction.

Due to the added space, loft-style apartments can often be a bit more expensive per square foot, to rent or buy, than condos or other apartments. But if you love the look and feel of a loft—natural light, large windows, high ceilings—it may very well be worth the extra cost.

And even if you like open spaces, you may want to consider some ways to break up the space and create the illusion of separate rooms by using bookcases, credenzas, or other structures to partition off areas, particularly the bedroom space and living area.


For this and related articles, please visit Realtor.com

When it comes to making the largest purchase of their lives, most homebuyers would prefer to play it safe in choosing a loan.

That’s why fixed-rate mortgages, the gold standard of home loans, have long been the most popular. These 15-, 20-, and 30-year mortgages aren’t exciting. But what they lack in style, they make up for in stability.

Borrowers can lock in the amount of their monthly mortgage payments (minus taxes, insurance, and homeowners association fees) for the duration of their loans. Then they can sleep soundly knowing their housing bills won’t just shoot up at some future date. They’re all set.

However, with the troubling combo of high mortgage interest rates and expensive home prices, many first-time and other buyers are learning they can no longer afford to become homeowners with a fixed-rate mortgage. So they’re looking into other options. And there are plenty out there: adjustable-rate mortgages, interest-only mortgages, 2-1 buydowns.

Some of these loans and programs start off with a few years of cheaper monthly mortgage payments, which can help cash-strapped buyers become homeowners. But borrowers should proceed with caution—and fully understand the fine print. The monthly payments on these loans typically rise, sometimes substantially, over time.

If mortgage rates fall, borrowers can refinance into new loans with lower monthly payments. But if rates stay elevated, or worse, rise, buyers could be saddled with higher payments that may be tough to afford.

Those still scarred from the Great Recession will remember watching in horror as millions of homeowners lost their properties to foreclosures and short sales after their mortgage payments suddenly spiked. Those bad mortgages set off the years-long, global downturn—making the boring, fixed-rate mortgages look pretty good.

These days, though, those predatory, subprime mortgages have largely been eliminated. Many loans have caps on how high a borrower’s future payments can rise. And if mortgage interest rates fall, as expected over the next few years, borrowers could wind up saving money by choosing one of these loans.

So what do today’s homebuyers need to know when choosing a mortgage?

Most Common Budgeting Mistakes (and How to Fix Them)

Shop around for a mortgage

Shop around for a mortgage! Your persistence could save you thousands of dollars a year. There are fewer buyers out there hunting for homes because they can’t afford the higher mortgage rates. So lenders are hurting for business. That can work to your advantage.

Mortgage rates and fees can vary quite a bit from lender to lender, and lenders may be more willing to compete for your business. So play them against one another. If you have a strong credit score, are putting down a large payment, or are a customer of the bank, ask for a lower rate or for fees to be waived. Then see if you can find a better deal elsewhere.

Many lenders will match what their competition is offering, which is what happened when I bought my house last year. So if you would prefer to go with one lender, but get a better deal elsewhere, see if the lender can match it.

Adjustable-rate mortgages are waging a comeback

Adjustable-rate mortgages, or ARMs, have gotten a bit of a bad rap over the years as the interest rates on the loans are constantly changing. However, borrowers on tight budgets can save some money with these loans—at least initially.

The most common is the 5/1 ARM, although borrowers can also choose a seven- or 10-year ARM. You typically receive a lower mortgage rate for the initial years of the loan, making ARMs popular right now because of higher rates. For a 5/1 ARM, the mortgage rate is fixed for the first five years, then it adjusts annually to the current rates.

It’s a risk that makes it difficult to calculate your future expenses. If the rate is higher, then a borrower’s monthly housing payments will increase for that year until rates readjust. That could really stretch a budget very unexpectedly. If rates are lower, though, then your payment can go down and you could wind up saving money.

You could wind up getting a great deal or get financially screwed—depending on which direction mortgage rates move.

The good news is there are generally caps placed on how much higher rates can be in a year and how much higher they can go during the life of the loan.

You can also refinance into a 30-year fixed-rate loan, which may be appealing if rates fall. The catch: Refinancing isn’t free. You typically pay between 2% and 6% of the loan amount, which generally totals thousands of dollars.

More buyers are exploring interest-only loans

Interest-only loans have also been gaining in popularity as buyers look for ways to save money. For the first three, five, or 10 years of a typical interest-only loan, borrowers pay only—you guessed it—the interest on the loan. Then they spend the next 20 or even 30 years paying off the balance of the loan, which is structured as an ARM.

Since you’re paying only interest in the beginning, the mortgage rates tend to be high, while the monthly payments are usually lower. However, once the interest-only period ends, the monthly payment usually rises significantly and can even double or more.

These loans are generally best for the uber-wealthy who are buying $20 million homes, investors who plan to flip the property, or doctors and other professionals who may not have a large down payment but fully expect their income to rise. They’re rarely used by everyday buyers who plan to live primarily in these residences.

The mortgage rates on these loans are generally high, making it harder for many borrowers to qualify for these loans. They often require higher down payments. And since you’re paying only interest for the first decade, you aren’t building up equity in the home unless it appreciates. So if home values fall, you could find yourself underwater on your mortgage.

Buy mortgage points to lower your rate

Homebuyers who would prefer to stick with a fixed-rate mortgage can lower their mortgage rate by buying points. It’s not cheap, but those who have the cash can often save themselves thousands of dollars over the life of their loans.

Borrowers can usually purchase points in 0.25% increments, which generally cost about 1% of the full mortgage amount. That means you’ll typically pay $4,000 on a $400,000 mortgage to bring down your rate by 0.25%.

Before you splurge on points, think about how long you plan to stay in your home. If you plan to age in place in the home and have the extra cash, it might be a good option. If you don’t expect to be there long, it may not make financial sense.

Have the seller or builder buy down your rate

Just a few months ago, buyers were waiving inspections and promising to name their firstborn after sellers to get a house. These days, more buyers are asking their sellers and builders to buy down their rates—and they’re getting it.

The most popular is the 2-1 buydown, which temporarily lowers a borrower’s mortgage rate. In the first year, your mortgage rate is 2 percentage points lower than the current rate, in the second year it is 1 percentage point lower. Then it resets to whatever the rate was when you took out the loan.

Translation: If rates are currently 6.5%, then you would have a 4.5% rate in your first year, a 5.5% in your second year, and a 6.5% for the rest of your loan.

Many sellers and builders are eager to close the deal, and they don’t want to drop their prices. So they’re willing to buy down your rate. Just make sure that you can afford your monthly mortgage payments once the buydown period ends.

Consider a VA loan

If you’re eligible for a U.S. Department of Veterans Affairs loan, this may be the cheapest mortgage you can find. The fixed- or adjustable-rate loans don’t require a down payment or private mortgage insurance. They also typically offer cheaper closing costs and lower mortgage rates than fixed-rate and other loans.

The catch is these mortgages are available only to veterans, active-duty military members, and their surviving spouses.


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Furnishing a home—whether you’re a new homeowner or you’ve moved to larger digs—can be a time- and budget-consuming struggle, especially if you want quality pieces that aren’t made of plasterboard and glue. But finding great furniture doesn’t have to swallow you—or your salary. In fact, I furnished my house for less than $3,000.

A year ago, my partner and I traded our life on the road for a cabin in the mountains. But, as romantic as settling down sounds, there was a major downside: We didn’t own a stick of furniture.

While being as thrifty as possible wasn’t initially one of my furniture goals, the game was on once I scored a like-new glass and metal patio table set online for $75. And how little I could spend on furnishing our home—with quality furniture—quickly became a challenge that had my total commitment.

The result was beyond rewarding when I realized I’d spent just under $3,000 for all my furniture. Bonus: The only new things I purchased were two mattresses. Here’s what I learned on this journey—and how you can decorate your home on the cheap, too.

How I Furnished My Entire Home for Less Than $3K: 6 Thrifty Tips

1. Join local thrift groups

Buy Nothing or “garage sale” groups on Facebook Marketplace are networks of buyers and sellers that are local online thrift collectives. “Spend nothing” groups are specifically for people who want to get rid of things without charging a dime.

Facebook Marketplace is one of the best online forums for scouting used furniture. When using Marketplace, you can customize your search results by expanding the radius of your location and trying different categories or keyword searches. For example, when I looked for a patio table, I searched for both “outdoor table” and “patio set.”

Score: I also used Facebook Marketplace to find a hardwood dining set with four chairs for $100, a Mexican wormwood hutch ($200) and matching bookshelf ($100 from a different seller), a knotty pine coffee table ($50), an antique wooden chest ($75), and two bedside tables ($120).

Running total: $645.

2. Visit consignment stores

Your local consignment stores may be pricier than what you’d find online, but you can find quality used furniture and closely inspect what you’re buying. You’ll want to see whether or not some essential items for your home—like a sofa or area rug—are clean and in good condition.

Score: I found my sofa set for $800, two lamps for $30, and three indoor planters for $40 in a consignment store.

Running total: $1,515.

3. Splurge selectively

If you’ve spent weeks searching for specific items, it might make sense to spend a little more to get the perfect piece of furniture—even if that means paying full price. And once you’ve bought some furniture, you might need to shell out more to match a style or aesthetic you want to maintain.

Similarly, you might want to splurge on certain items to guarantee their quality and cleanliness. (For example, buying a new mattress rather than a cheap used one.) The key is to know when it’s worth shelling out the bucks. If it’s an item you desperately need and won’t find for less, spending more might be the answer.

Score: I bought two Casper mattresses for $700 each.

Running total: $2,915.

4. Keep an eye out for freebies

Depending on where you live, you might be able to find some quality furniture on trash night. And if you see a dumpster outside someone’s home, don’t be shy—slow down and keep your eyes peeled for anything that might be worth taking and restoring. A coat of paint can revive just about any piece of furniture.

Score: I found an outdoor furniture set, outdoor planters, and one of those hideaway hose organizers—all for $0.

Running total: Still $2,915.

5. Watch for sales

If you’re patient, you might catch a furniture sale in one of your local stores or malls. Keep an eye open for deals after holidays and whenever the seasons change. For example, fall can be a great time to find bargain outdoor furniture. Why? Because no one else is shopping for a patio set at the end of the season.

Score: J.C.Penney bedsheets ($35) and a Bed, Bath & Beyond towel set ($40).

Running total: $2,990.

6. Come up with a plan

Furnishing an entire home (or even just a room) can be incredibly stressful. That’s why it helps to have a plan. Sit down, develop a numbered list of the furniture you need, and prioritize. That way, you’ll know what’s worth splurging on or if you should wait a bit longer for a better deal.

And get comfortable with haggling: Bargaining has never been my strong suit, but learning the skill is a must if you’re trying to furnish your entire home on a budget.

I found out that most sellers expect you to bargain. And it turns out that bargaining is why some sellers set prices higher in the first place: When you bargain with sellers, they’ll still be getting a fair price—and you’ll be getting the deal of a lifetime.


For this and related articles, please visit Realtor.com

Think iron balconies, terra-cotta roofs, and ornate details that evoke the romance of Spain or Italy—with the advantage that a trip across the Atlantic is not required to soak it all in. Mediterranean homes can be found right here in the United States!

Also referred to as Spanish Modern, Mediterranean houses are found across the country, although they’re most common in warm-weather climates that are comparable with the temperate Mediterranean countries’—in California, Florida, and other southern states.

Here’s more about Mediterranean homes, and how to decide whether this architectural style is right for you.

What Is a Mediterranean House? A Vacation Vibe Right at Home

Characteristics of a Mediterranean house

A Mediterranean home’s most iconic feature is a low-pitched, terra-cotta roof, and the exterior paint is typically a light cream or off-white. The homes can be one or two stories and vary in size, although they tend to be expansive.

They often have swimming pools in the backyard, offering a sense of wide, blue vistas of water, and they come with outdoor living spaces aplenty.

Some common characteristics of Mediterranean homes include:

  • Large windows
  • Iron balconies
  • Open floor plans
  • Stucco exteriors
  • Ornamental details
  • Arches
  • Higher, vaulted ceilings
  • Lush pool areas
  • Courtyard entryways


Is a Mediterranean home for you?

“These homes have always been popular, especially in lake communities and the suburbs of metropolitan areas,” says Owen Boller, a real estate agent who covers a two-hour radius around Manhattan. “There are quite a few available for sale.”

Boller adds that Mediterranean homes offer an extravagant feel that’s attractive to many buyers. And despite their distinctive look and atmosphere, they are surprisingly flexible.

“There are so many details, but you can make a Mediterranean home simple and functional or very formal,” says John Nations, construction manager for New Pointe Communities in San Diego. “Depending where you live, you can choose earth-tone colors or lighter colors, like blues and greens, if it’s a beachy area.”

On the other hand, Mediterranean-style homes can be expensive to maintain in colder climates, as the high ceilings and large windows often make heating them expensive. Insulation and energy-efficient windows can help, but they too can be costly. The size of these homes, which tend to be larger than others, can also result in higher property taxes, as well as higher maintenance costs.

While they will always have their aficionados, Kathryn Bishop, a real estate agent in Los Angeles, says she’s seeing a decline in their popularity.

“Mediterranean homes here were built ad nauseam 10 to 15 years ago,” she says. “Now, farmhouse and Cape Cod are the popular new build styles.”

Still, if you crave opulence, it’s difficult to beat the way a Mediterranean home can mentally whisk you away to those azure seas.

For this and similar articles, please visit Realtor.com

Homeowners across the country are sitting on a record amount of home equity.

Home equity refers to the difference between the current value of a home and how much is still owed on the mortgage. Therefore, if you have a house worth $400,000 and you’ve paid $100,000 toward your mortgage, your equity is equal to 25%.

As a share of total real estate value in the country, home equity has risen along with home prices to currently hover at 70.5%—its highest level since 1984. To put that number in perspective, 10 years ago, in 2012, home equity hovered at just 46%.

“For over a decade, home prices have climbed consistently, with an acceleration to a double-digit pace over the most recent two years,” notes Realtor.com® Chief Economist Danielle Hale. This, in turn, has helped push the total value of owner-occupied real estate in the United States to a new high of $41.2 trillion.

So, with homeowners sitting on a healthy amount of home equity, is now a good time to tap into that wealth?

It’s a reasonable question, particularly if you’re worried about inflation, a looming recession, job loss, or one of many economic uncertainties dogging Americans today. Currently, consumer debt is $320 billion higher than a year ago, and combined with tumbling mutual funds and stock market holdings ($4.2 trillion lower than last year), people may need some extra cash.

“Tapping home equity, which is generally available at lower rates of interest than personal loans or other types of lending, can make sense to fund investments such as home improvement, education, or starting a business,” says Hale. “But it’s important to remember that these loans will need to be paid back, either with proceeds from the sale of the home or with other funds if you want to continue living there.”

While it’s oh, so tempting to unlock that capital, just remember you’re not only increasing your debt load, but you’re also reducing the equity you’ve built. Nonetheless, there are smart ways to go about using that money, and smart reasons to do so as well.

“It’s always a good time [to tap into equity] if it is to reduce other debt or pay for improvements,” says Rocke Andrews, mortgage broker and owner of Lending Arizona in Tucson.

“With the short-term rates going up due to the actions of the [Federal Reserve], your other consumer debt may be going up quickly also: the cost of car loans, of credit card interest. So don’t lose sight of the savings that you can get,” adds Andrews. “Just the psychological relief of not having to worry about paying those bills every month is well worth it.”

That said, skyrocketing interest rates are not only boosting the borrowing costs on mortgages, but raising rates across the board for home equity options, too. This is prompting changes in the way that homeowners are choosing to tap into the real estate capital they’ve amassed over the years.

So here’s a guide to some of the new rules on tapping home equity today.

The New Rules on Tapping Home Equity Today—and Some Common Mistakes To Avoid

Ways to tap into home equity—plus, the pros and cons

If you are thinking of pulling money out of your house, there are three options most homeowners turn to.

Cash-out refinance

A cash-out refinance involves refinancing your existing mortgage for more than what you originally owed on the house and taking the difference in cash. True to its name, you are “cashing out” some of the equity in your home in order to get the larger mortgage.

For example, say you had a $300,000 loan, on which you still owe $200,000. That would mean you have $100,000 in equity in your house. Maybe you want to pay down some credit cards or college tuition, so you cash out $25,000 of that equity and get a new mortgage for $225,000.

If your property has risen in value (as most do over time), this also increases home equity. Let’s say your home’s value has risen from $300,000 to $325,000 since you bought it. If, as in the previous example, you owe $200,000 on that loan, you could cash out $25,000 but essentially still keep the same mortgage payment on $200,000 while pocketing $25,000.

The interest rate on a cash-out refinance is fixed, making monthly payments easier to factor into the budget.

Cash-out refinances are a good option for homeowners who want only one mortgage to keep track of and pay off, and also for those who may not have a great credit score. Because they are federally backed by Fannie Mae, Freddie Mac, the Federal Housing Administration, and Veterans Affairs, refinances have less stringent credit score requirements and underwriting than other methods of borrowing against your house.

The process for a cash-out refinance is similar to refinancing a mortgage, but homeowners usually end up paying more in interest after a cash-out refinance over the long term, because they’re increasing not only the amount but also the length of their loan. (For example, if you were already 10 years into a 30-year loan, refinancing for another 30 years means you’ll be paying for 10 years longer than had you kept your original mortgage.) And like a typical mortgage process, they will be paying closing costs, which is typically anywhere between 3% to 5% of the new loan amount.

A year ago, cash-out refinances made up a majority of equity withdrawals thanks to record-low mortgage rates. But with the average rate on a 30-year fixed mortgage topping 7% in October, which is pushing all rates up with it, a cash-out refinance makes less sense today.

“As interest rates climb, a cash-out refinance—which resets the rate on the total outstanding loan balance—makes less financial sense for many households,” Hale says. “Instead, households are more likely to use home equity loans or lines of credit, which enable them to tap only a limited amount of equity at today’s mortgage rates, keeping the rest of their mortgage debt at their current presumably lower rate.”

According to the August 2022 Housing Finance Policy Center’s Chartbook, “Higher rates this year have also forced a sharp cutback in cash-out refinances, which had soared in the last two years as some homebuyers used the refinance opportunity to extract equity.”

“Rising mortgage rates have served a body blow to overall refinance activity in 2022,” says Nik Shah, CEO of Home.LLC. “Cash-out refinance activity has dropped significantly in response. Cash-out refinance volume in the second quarter of 2022 is down by an estimated 44% from a year ago.”

Home equity loan

Similar to a cash-out refinance, a home equity loan allows you to borrow against the equity in your home. The biggest difference is that while a cash-out refinance replaces your existing mortgage with a new one, a home equity loan involves taking out a second loan on top of your first.

The interest rate and payments on a home equity loan are fixed, meaning the rate doesn’t change and homeowners will be taking on a steady loan payment each month.

Most mortgage lenders will allow homeowners to borrow up to 80% of their home equity in the form of a home equity loan. For example, if your home is worth $400,000 and your mortgage balance is $200,000, you have 50% equity in your property and would be able to borrow up to $120,000. (You can crunch your own numbers with an online home equity loan calculator.)

Home equity loans tend to have higher credit score requirements and more stringent underwriting compared with a cash-out refinance. But they’re a good option for homeowners who don’t want to touch the great rate on their first mortgage.

“If your current mortgage rate is low, you don’t have to give that up [with a home equity loan],” says Joe DeMarkey, strategic business development leader with Reverse Mortgage Funding in Holliston, MA. “And if you use the loan for home improvements or renovation, the interest may be deductible.”

One thing to keep in mind is that with a fixed-rate loan like a home equity loan, you will pay interest on the entire loan amount—even if you’re using it incrementally, such as for home renovation.

And if you do end up selling your house, the balance on the home equity loan will be due in full.

Home equity line of credit (HELOC)

Similar to a home equity loan, a home equity line of credit (also known as a HELOC) allows homeowners to borrow money and essentially open up a line of credit using the equity in their home as collateral.

The biggest difference between a HELOC and a home equity loan and a cash-out refinance is that a HELOC acts like a credit card. Once approved, homeowners can borrow on an as-needed based, up to the loan’s limit, over and over again through the term of the loan (typically five to 20 years).

Most mortgage lenders will allow homeowners to borrow up to 75% to 85% of a home’s value, minus what they still owe. For example, if your home has been appraised at $500,000 and you still owe $200,000 on the mortgage, the bank will calculate 75% of the value ($375,000 in this case) and then subtract $200,000 (the amount you still owe). They would then set up a HELOC with a $175,000 limit that you can borrow against over time.

Homeowners pay interest only on the amount they borrow over the life of the loan. So if they borrow only $5,000 of their $35,000 credit limit, they pay interest on only $5,000.

The benefit of a HELOC is the flexibility of opening what is essentially a revolving line of credit, which is great for those who aren’t sure how much money they need to borrow, or when they’ll even need to use it. For instance, if you’re planning a home remodel and the project is expected to take six to eight months, you can open a home equity line of credit and pay the contractor over the course of the project, as bills come due.

They’re a great “rainy day fund you can tap into,” says Amit Gandhi, an independent loan originator and financial adviser in the Dallas-Fort Worth Metro area, who is an advocate of taking out a HELOC before you need one because there is no way to predict what the real estate market will do tomorrow.

“It’s the cheapest form of credit that you’ll ever have aside from a 0% credit card,” adds Gandhi.

Brad Cahoone, mortgage broker, banker, and president of Global Home Finance in Lewisville, TX, says a HELOC is good for someone who needs a large amount of money right away (they take as little as two weeks to obtain), and they want to be able to use the line of credit over and over again without having to go through the mortgage process repeatedly.

The other benefit of a HELOC: Because they’re a bank product, they don’t include the closing costs associated with refinancing or a home equity loan.

The big downside of a HELOC is that the interest rate is not fixed and may adjust (and go up) over time.

“With a HELOC, your rate can keep going up every month or every time the Federal Reserve raises rates. Your rates are not locked in,” warns Andrews, of Lending Arizona. For this reason, Andrews is an advocate of a home equity loan over a home equity line of credit due to the fixed interest rate. That said, if you need the money fast and/or aren’t sure how much you’ll need over time, a HELOC trumps a home equity loan in terms of speed and flexibility.

Although home equity loans and HELOCs each come with their unique pros and cons, both are increasingly popular options today, particularly compared with cash-out refinances.

How to refinance your mortgage | CNN Underscored

Mistakes to avoid when tapping into home equity

The No. 1 advice right now: If you’re even considering tapping into your home equity in the next year or two, do it now before the rates go up even further—or before home prices start to come down, even slightly.

“You don’t know what the real estate market is going to be tomorrow,” Gandhi says. “With home prices, we’ve seen them plateau in the last two months, and in some markets, they’ve declined steadily. Nothing to be frantic about, but houses are sitting on the market longer now. What’s that going to do to home values? It’s going to start pulling back a little bit. It’s not going to be worth as much as it was last year.”

He notes that homeowners considering tapping into home equity ideally should catch it at the peak of home values.

Perhaps what’s more important is to consider what you’re using the money for in the first place. Using it to pay for home improvement, investments, college tuition, and higher-interest debt all make sense. Using a home equity loan to buy a boat? Might not be the smartest move.

“The mistakes that people make today versus decades ago is they are cashing out equity for things that may not bring value,” says Eric Jeanette, president of Dream Home Financing in Freehold, NJ. “Using your home like a piggy bank to buy a [new] car is not a smart financial decision, but consumers are doing more of this than in the past.”

If, however, the goal is to pay off higher-interest credit cards or other debt, then tapping into equity and taking out a loan or line of credit definitely makes sense, says Ralph DiBugnara, mortgage banker, real estate investor, and president of Home Qualified in New York City.

“People are so stuck on these lower mortgage rates that they don’t want to touch their first mortgage,” he says. But this doesn’t make sense if “they’re paying credit cards at 16%. We have to be smart and consider if a cash-out refi makes sense to pay off the higher-interest credit card.”

If you are considering tapping into home equity in today’s market with rising interest rates, two of the most important things you can do as a homeowner is to compare lenders and see where you can get the best terms and rates. And with a recession looming on the horizon, it’s smart not to overextend yourself financially.

“It’s important to only borrow as much as you will actually use, so that you don’t end up paying more in interest than necessary,” says Josh Craven, mortgage adviser and CEO of SprintFunding.com in Bonsall, CA.

Hale agrees, adding, “Increasingly, homeowners are choosing to tap smaller amounts of equity so that they can keep balances at lower [levels].”


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Buying a house while simultaneously selling your current home is always a treacherous tight wire to traverse—but in today’s high-priced, high-interest-rate housing market, it’s both a blessing and a curse.

The good news for home sellers is that over the past year, demand for homes has driven prices through the roof, pushing home equity to record levels. Homeowners are essentially sitting on a pile of cash, which would definitely come in handy if they start shopping for a new home.

Yet any homebuyer out there today will also face steep mortgage interest rates, which have more than doubled over the past year to the 7% range. This has raised the cost of housing by around 70% compared with a year earlier, according to a recent analysis by Realtor.com® Chief Economist Danielle Hale.

Most sellers who move would need to get a new mortgage, at a higher rate. It’s no wonder, then, that many are deciding to stay put.

“Two-thirds of homeowners right now are sitting on a sub-4% mortgage, and about a quarter are sitting on a sub-3% mortgage,” says Lisa Sturtevant, chief economist of the Bright MLS. “And so you can imagine existing homeowners, even if they wanted to move, are really reticent to give up their very favorable mortgage rate. It’s like golden handcuffs where you’re locked in.”

Still, it’s worth noting that some home sellers might be able to justify and absorb the higher interest rates since their home sale will likely bring a windfall of cash. And in theory, that money could go toward making an all-cash offer on their next house—and getting a very good deal on it, too.

“With home prices still high and buyer competition thinned out due to high mortgage rates, it may be a good time for some sellers to make a move, especially those who may not need a mortgage to make their next home purchase,” says Hale.

Still, an all-cash offer is a lot of financial eggs in one big basket. Is it worth the risk?

If you’re one of these homeowners sitting on a nice chunk of equity and looking to sell your house and buy another at the same time, there are ways to navigate today’s current financial terrain to your advantage.

How To Buy and Sell a Home at the Same Time—in Today’s Haywire, High-Interest-Rate Housing Market

Should home sellers buy or sell first?

The first question most home sellers ask themselves is: Should I buy or sell first? Each decision comes with its distinct pros and cons.

“Buying first gives you an opportunity to move out before putting your prior home on the market,” Hale says.

This helps a seller avoid the headaches of living in a home that is for sale, which means keeping it in pristine condition and being ready to vacate often (and at short notice) when buyers want to stop by for a tour.

On the other hand, “Selling first lets you know just how much you’ll make on the sale before shopping for your next home,” Hale says. “But it may mean finding a temporary place to live in between.”

Hale suggests asking yourself the following questions if you’re planning to sell and buy at the same time:

  • Where do I want to live next?
  • How disruptive will it be to have the home I live in on the market?
  • Can I handle the possibility of two mortgage payments—and if so, for how long?

While buying first allows you to avoid the annoyance of finding temporary living quarters and moving twice, it’s definitely more risky financially.

If your old property does not sell quickly, you could end up paying for two properties at once. This is a particularly strong possibility right now, since homes are lingering longer on the market than they did last year, and the market is bound to get even more sluggish if mortgage interest rates remain high and as we glide toward (and beyond) the holidays.

Options for sellers who want to buy first

For those who do want to buy first, “there is some risk, but also some great upside if done correctly,” says Mark Hardy, managing partner at Churchill Morgage in Orange, CA. “There are bridge loans that will allow for short-term use of equity from your current property to serve as a down payment for the next property if this is needed. This can position you to make a noncontingent offer and secure a much better price or better terms.”

Current rates on bridge loans range from 6% to 16% with the idea that you’re paying off the loan as quickly as possible, as soon as your original house sells.

Homeowners who want (or need) to sell quickly (because you’ve bought a new home or for other reasons) also have many new options today for getting a sale through fast.

“One bright spot for today’s sellers is that there is much more innovation in the real estate landscape and ways to get assistance with buying and selling at the same time than ever before,” Hale says.

For instance, sellers can skip the traditional listing process entirely and field offers from investors and iBuyers who’ll buy their home quickly with all cash. (These options are explained in more depth at Realtor.com Seller’s Marketplace.)

Options for sellers who want to sell before buying

For homeowners who prefer to sell first, one way to avoid moving into temporary accommodations is to negotiate a lease-back from your home’s buyers—where they agree to let you remain in your current home, paying rent, until you find a new home you want to buy.

Just keep in mind that, even after your home sells, it may be a while before you see that money.

“Getting the proceeds from the sale of your home can take some time, maybe longer than you expect,” warns Hale. “So if you’re trying to time the purchase and sale of a home, be sure to allow enough time for the proceeds from your home sale to be in hand before you schedule your closing purchase.”

Should sellers make an all-cash offer if they can?

If you’ve built up some sizable home equity and your home sale gives you enough to make an all-cash offer on your next place, that’s an attractive prospect in today’s high-interest-rate environment. It can also get you a deal since all-cash offers typically result in a 3% to 4% discount over a financed offer, Hardy notes.

An all-cash offer might also be tempting to try since it will likely set you apart from any competition you may have from mortgage-backed buyers. That said, you should not feel the need to funnel all your proceeds into an all-cash offer if that makes you uncomfortable or stretches your finances too thin.

“Don’t pay in all-cash because you think you have to be the most competitive offer,” Sturtevant says. While all-cash offers ruled during the ultracompetitive market last year, that’s no longer the case today.

Another option that’s less risky but still helps your offer stand out is to finance a smaller portion of the property.

“If there’s an opportunity to put 50% down, it makes it a little bit easier to swallow that bitter pill of a 7% mortgage rate if you’re financing a lower loan,” says Sturtevant.

Hale adds that “with mortgage rates near two-decade highs, minimizing the amount of borrowing you need to do to buy a home can make a big difference.”

Another option is to make an all-cash offer, then get a mortgage on your home later once interest rates go down.

An alternative to all-cash offers: Become a certified homebuyer

Homebuyers without as much equity built up in their home have other ways to keep their offer on new homes competitive. Hardy points to the strategy of becoming a “certified homebuyer,” which allows sellers to close quickly, without the need for a loan contingency.

Similar to a mortgage pre-approval process, the process of becoming a certified homebuyer requires proof of income, assets, employment, identity, and credit score. The difference is that all financial documents are reviewed by an underwriter, which gets you conditionally approved for financing.

“We’ve found this is a great way to help a seller feel very comfortable in accepting our client’s offer and secure terms quite close to what a cash offer would receive,” Hardy says. “The end result is that a buyer can better use the cash—and can now reinvest as desired—and has also purchased a new property at a much better price.”


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Renovating a home, no matter the time of year, can be equal parts exciting and overwhelming. However, renovating in the winter may come with its own set of additional issues.

Exterior renovations are especially risky during the colder months since the ground at your construction site can be slippery and wet. Plus, you need to take holiday travel schedules, inclement weather, and freezing temperatures into consideration. All of this can make finishing your remodel on time even more challenging than it already is.

To help you better prepare for wintertime home revamps, we tapped a few experts and asked them to divulge the most common missteps homeowners make. Avoid these mistakes when diving into a wintertime home renovation.

1. Choosing the wrong materials and equipment

It’s important to keep in mind that plastic window sealants might not stick and timber might expand when it’s freezing.

(Getty Images)

Not all materials can withstand freezing temperatures and snowy conditions.

“Choosing materials that will stand up well against colder temperatures and adverse weather conditions is essential,” says James Leroy, contractor, owner, and founder of Pro Home Remodeling in Tigard, OR.

For instance, keep in mind that plastic window sealants might not stick and timber might expand when it’s freezing.

“Do some research before starting your project,” says Leroy. “And make sure you have everything you need before getting started—including plenty of spares.”

2. Not paying attention to electrical safety hazards

Working with electricity in the winter can be dangerous if there’s recent heavy snowfall. Circuits and fuses can malfunction when wet, and poorly insulated wires can become damaged from low temperatures.

Downed power lines on your property might also be energized and cause electrocution if touched.

What’s more? Snowstorms often cause power outages that could prevent work from getting completed.

3. Not taking snow and ice into consideration

Ice debris, from roofs and scaffolding, can fall and injure workers when outdoors.

(Getty Images)

We all know wintertime weather means having to contend with snow and ice, but many homeowners underestimate just how these factors will affect construction projects.

“Just because it’s cold outside doesn’t mean you can’t do any renovation work,” says Leroy. “But you need to consider that temperatures will be lower than usual and that snow and ice can cause problems.”

Snow and ice around the outside of the home can create slick surfaces that could cause slips and falls. Ice debris, from roofs and scaffolding, can fall and injure workers when outdoors. And icy temperatures can also increase the risk of cold stress-related injuries like hypothermia and frostbite.

Try to plan your work schedule around the weather, but if you must continue on, dress appropriately.

4. Forgetting about holiday schedules

Zach Barnes-Corby, head of construction at Block Renovation in New York City, says that preparation is key.

“This is true for renovations generally speaking, but particularly true during the winter,” Barnes-Corby says.

Holidays and travel schedules can cause disruptions to your scope of work.

“You don’t want things being held up because a shipment of tiles got stuck in the holiday rush, or your contractor is set to travel halfway through your project,” Barnes-Corby says.

Barnes-Corby advises getting ahead of the holidays when planning a home renovation. Many contractors and suppliers close around the holidays, but planning well can help avoid any headaches.

5. Not making indoor space available for subcontractors

During the winter it can be very cold, so tradesmen will need space in the house to set up and run their tools.

(Getty Images)

Subcontractors, like painters or tile setters, are essential to any renovation. They’ll need plenty of space to work, and you should be especially thoughtful of their needs, especially during inclement or cold weather.

Most tradesmen set up shop outside or in a garage to do “messier” portions of their work, says Jordan Obermann, co-principal and co-founder of FORGE + BOW Dwellings in Fort Collins, CO. “However, during winter it can be very cold, so they’ll need space within the house to set up and run their tools,” he says.

Keep an open line of communication with your subcontractors, and make sure they have all the space they need to get the job done correctly.

6. Taking on certain projects at the wrong time of year

Indoor home renovations are easier to complete in the wintertime because the climate can be controlled. But for outdoor projects like a home addition or new roof, it’s probably best to hold off until the temperature heats up.

You can’t excavate frozen ground or pour concrete if it’s lower than 40 degrees out, points out Matthew Miller, principal and founder at StudioLAB in New York City.

Working on a roof during poor weather can be difficult, too. Roofs are inherently slippery, but recent rain, snowfall, or ice can make roof construction downright dangerous.

“In a nonregulated winter environment, you don’t want to install items that need to be temperature-controlled,” Miller says. This includes projects like installing doors, windows, and flooring.
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Two smart moves when updating your kitchen cabinets include fresh paint and new hardware. But you should also look beyond paint samples or the shape of drawer pulls and think about how you use your kitchen, and whether the organization of your kitchen is doing the best job.

“The best design in any room incorporates how the space is going to be used,” says Karen Gray-Plaisted of Design Solutions KGP.

Case in point, do you still need a drawer dedicated for sippy cups and melamine bowls now that your kids are older—or could that cabinet be better used for something else?

When you are upgrading your kitchen cabinets, don’t be swayed by every trend you spy on Instagram (we’re looking at you, open shelving!). Be brave and create the kitchen that you want to wake up to every morning.

Here are seven design ideas to consider when you’re updating your kitchen cabinets.

1. Try two colors (instead of one)

Photo by Paper Moon Painting

Navy kitchens have been getting all the heart-eye emojis lately, but it can make a kitchen seem dark. Don’t be afraid to use a two-tone color scheme, with a darker hue on the lower cabinets and a contrasting lighter color above, say the pros.

“A deep green or blue paired with a lighter upper is a refreshing look,” says Gray-Plaisted.

2. Open up lower cabinets

Photo by SV Design

Many people flock to open shelving, or they remove their upper cabinet doors to expose their box storage. But revealing the lower cabinets is just as effective and can create an airy feeling in your kitchen.

And if you’ve ever rummaged around in a dark lower cabinet for a Bundt pan or rice cooker, you’ll save time and stress on your back with easy-access bottom cabinets.

Create theme storage by dedicating certain areas to particular needs—think baking dishes and mixing bowls in one section and egg pans and small skillets in another. (This is helpful for open shelving as well as closed cabinets!)

3. Reconsider your storage needs

Photo by Bakken Design Build 

Tastes change over time—and kids grow up and move away. Left in their wake may be storage and other cabinet solutions that don’t make sense anymore.

“Cubbies for wine or certain appliances may not be needed, so consider how you want to live right now and going forward,” says Marty Basher, an organization professional at Modular Closets.

For example, that roll-up, garage door–style cabinet for the standing mixer you’ve stopped using could be replaced with a tricked-out spot for a cappuccino maker. Or the messy dog food bags that live under the sink could finally be stored properly in a pet-feeding station.

4. Skip paint—and add veneer

Photo by Cronos Design 

To rehab kitchen cabinets, think beyond paint. If you have wood cabinets, you might want to sand and stain them a different color. Flat panel doors are a good candidate for new veneer.

“Veneer comes in lots of colors and styles, and it’s actually something you can DIY,” says Basher.

And even if you don’t want to completely cover your cabinets with veneer, you could use it as accent trim, he adds.

5. Pick interesting glass

Ho-hum glass-front cabinets again. Or are they? Look closer, and you’ll notice that these kitchen boxes don’t hew to the same style you see in everyone’s house. Check out the different options for this look, including fluted, wavy, or frosted panels, says Gray-Plaisted.

Bonus: With glass that obscures the insides of your cabinets, you won’t have to work as hard to stack and arrange your cups and bowls every time you empty the dishwasher.

6. Try chicken wire, cork, or chalkboard cabinet faces

Photo by Case Design/Remodeling of Indianapolis

Glass isn’t the only choice when updating your kitchen cabinets. Chicken wire is an unexpected surprise on the fronts as it offers a glimpse of your pretty plates as well as infusing the whole room with a farmhouse vibe.

Or go for cork or chalkboard as inserts on cabinet faces. With handy surfaces like these, you can pin up notices, announce the evening’s dinner menu, or make a to-do list.

7. Consider stand-alone storage

Photo by Davonpor

Sometimes upgrading your kitchen cabinets means adding a separate piece of furniture. A free-standing pantry or larder is an ideal solution for a corner space, whether you buy one just for this purpose or rehab an old china chest or curio cabinet. And if you choose the two-tone theme mentioned previously, you might continue it by painting this item one shade on the outside and a brighter, more exciting hue within.


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When you hear of a friend or family member buying a home, it sounds like a very wise thing to do—a savvy investment and a nice step to take in life. However, when roles are reversed and you are the prospective home buyer, you will quickly realize just how emotionally complex the process can be. After all, you aren’t just envisioning a place to rest your head. When you’re buying a home, you’re simultaneously imagining the memories you will make and evaluating how the layout will work for your lifestyle, whether the location is right and so on.

For many, the expense of buying a home is one of the major stressors. Further complicating matters for many house hunters around the country right now are record-low levels of inventory and record-high home prices. It’s worth remembering, though, that those numbers do not tell the full story. Mortgage rates remain low, and customizable homeowner insurance policies can go a long way toward keeping your budget in check.

The fact remains that house hunting is a big undertaking. But when you approach it with some strategies to help you stay positive, you can keep your calm while finding the perfect place.

4 Little Ways to Promote Peace of Mind and Positivity During Your Home Search

When you’re looking for a home, it’s fine (and expected!) if there are some criteria on which you are unwilling to compromise. Maybe your heart is set on a walk-in closet. Maybe you are looking for a fixer-upper to build some sweat equity in the home. Maybe you will only feel comfortable with a home that has a fenced yard for your dog. Starting by getting honest with yourself about non-negotiable factors can help you avoid wasting your energy during the search.

On the other side of the coin, you should also think about ways in which you would consider expanding your hunt:

  • Would you be willing to look at homes in neighboring communities?
  • Could you do with less square footage if there is more outdoor living space?
  • Do you need a finished basement now or is that something you could tackle in the future?

As needs change with the rise of remote work and kids going back to school, revisiting some items that were initially on your “nice to have” list could help open up a much larger selection of homes and price points.

Avoid financial guesswork

Buying a home is a process that involves both your heart and your head—and it can be heartbreaking to learn you fell in love with a home that’s outside of your budget comfort zone. Although mortgage rates and competitive sale prices can feel like moving targets, you can get a feel for the price of your homeowner insurance with online tools and quotes. Because homeowner insurance is necessary for anyone who is taking out a mortgage (and a good idea for anyone who owns a home), it is an important factor to consider during the house selection.

By also having an understanding of how different variables can affect a home’s insurance price, you may be able to narrow your search field. For example, a home on a low-lying side of a neighborhood may be more expensive to insure than one that is similarly priced just a few streets over. Or you may learn that a home with a new roof can help you save. When you keep factors like these in mind, you can be a more informed, empowered home buyer.

Work with experts you trust

In general, people will only buy or sell a home a few times throughout their lives. So, naturally, there are some questions that you may not even know to ask. That’s where it pays to put in a little work ahead of time to assemble a trusted, experienced team of experts who can help guide you through the process. Not only can this position you to find the right house, but it also can help you get it for the right price.

If you are just dipping your toes into the house search, start by getting referrals or reading reviews for real estate agents, mortgage lenders, and insurance companies. The truth is that reputation matters—so feeling like you’re well taken care of with a person or company is always the best call.

Don’t put pressure on your timeline

There are instances when a move has to happen on a specific timeline. However, if you’re in a position to be a little more flexible, you can set yourself up for a more peaceful experience. Historically, there are times of the year when inventory is low in the housing market. The flip side is that there may be more competition among other house hunters during higher inventory times. By giving yourself several months to see what is listed, you may be able to enter the market at just the right time.

When you’re immersed in the house search, it can feel like you constantly need to be on call and ready to act—and that doesn’t exactly lend itself to a calm, enjoyable experience. Just like you need occasional breaks from work, also be willing to take a step back from the search if it begins to feel like too much. If a house comes and goes during that time, it simply wasn’t meant to be.

Finally, when you’re looking for a house, know there is light at the end of the tunnel. Although you may not be able to picture the exact style of the home you’ll end up in or what the yard looks like, you should be able to channel the sense of peace that you will feel when you unlock that front door for the very first time.

Read the full article and more at Realtor.com