Q & A with Dottie Herman

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Q1 - What is the difference between a renovation loan and a home equity loan?

A - A renovation loan allows you to borrow money in advance of doing any work on your home and the loan amount is based on the IMPROVED value after the work is completed.  Equity loans are based only on the existing value of the property as is.  So if you do not have enough value and equity in your home to borrow the money needed for renovations it is best to pursue a renovation loan.

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Q2 - I recently bought a home about 6 months ago. Since then we have had some leaks and renovations to make that are out of our control, and of course we will never know if these are things the homeowner knew of. We now have a leak in our master bathroom and there is mold behind the wall. We need to renovate the entire bathroom and we can't afford to do that at the moment- what are our financing options?

A - When it comes to mold and other items that can impact your health it is best to act as soon as possible.  You can look at home equity and home improvement loans which are tied to your home.  For a lesser amount, you may even be able to borrow using a personal loan if you cannot complete all the work - maybe just enough to correct the structural issue, and then work on the rest over time. Another thought is to check with the local municipality and health agencies as sometimes they have loan programs or grants available for health related home repairs.  These are not common, but do exist in some places.

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Q3 - I recently put my home on the market, and the price the realtor gave me is less than I want to receive. What are some tips to increase the value of my home? We currently don't have an alarm system or a sprinkler system. Would that help? What are some other tips that are quick fixes?

A - You certainly can make those upgrades to your home. Often it's also helpful to focus on curb appeal items like a fresh coat of paint in the internal and external walls, and to make sure the lawn is properly cut.  But it is also important to remember that your return on those upgrades may still not bring you the price you want.  Before you go ahead and make these investments, request your real estate agent to price your home with these alterations.  After receiving that number, then make a determination about whether it is worth going forward with them.

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Q4 - My husband and I recently put in an offer on a house, but we just saw a home we love - how can we get out of this deal? All we have is an accepted offer.

A - I would recommend that you consult with your attorney on this, as a legal professional can give you proper guidance.  From what you have described, it may be possible that you're not bound, since you haven't signed a contract.

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If you have a real estate question for Dottie, please send it to; Dottie@RealEstateChannel.com.
 
NOTE: Due to high volume of questions, not everyone can be answered, but she'll do her best.

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