Tapping Equity to Make Our House a Home

*Republished with permission from Enjoy Magazine*

We can finally talk equity

My family and I often mused about that one magical day when we could do this or that with our house. For years, we lived with a mental list of repairs we would make if only we had the funds.  We bought our house in 2008, right as the real estate bubble was bursting. We finally came out from underwater as homeowners in 2016. Since then, home values in our neighborhood rose slowly, but steadily. Unfamiliar terms like “HELOC” began to creep into our conversations. Eventually, we began to realize that magical day had come. We called our lender.

Home equity 101

A quick, cliff notes version of how a home-equity loan works: When the assessed value of your house is higher than the principal amount left to pay on your mortgage, you have home equity. You can borrow against the difference; that is a home equity loan. For example, if you have $250,000 principal balance on your mortgage, but your home value is assessed at $300,000, you have an estimated $50,000 in home equity and could potentially borrow money from that equity.

Putting value back

We were excited.  We had to consider which choices made the most sense in our reality. Choices that would benefit all of us as a family. What we settled on was that we should put value back into our house since we were taking value out of it. We plan to live in this house for a long time. Therefore, we would try to add more long-term economic value as well as some creature comforts. There have been definite perks to the process. But unforeseen circumstances as well.

We started with new appliances. All the appliances in our house were at least twelve years old. They had lived good long lives but a couple of them had long-standing mechanical problems. An appliance upgrade would add comfort and help modernize our house. In theory, these appliances add long-term value because they should still be good for years to come. It was fun to look at new equipment and find out what today’s appliances can do – did you know there are refrigerators can now make coffee for you!  We took the conservative approach. We found a great stainless-steel package deal and the installation of all appliances went smoothly. So far, so good.

Next, flooring. The stairs from our first floor have been carpeted since the house was built in 2005. The stairs are a high-traffic area and the carpet looked perpetually dirty. No amount of carpet cleaner could rescue these sad steps. We upgraded to hardwood flooring. We’d get a staircase with a look we like better that was far easier to clean. This is where the unforeseen circumstances came in.

Beware of sawdust

We chose to redo the stairs during winter. The only heated working space for our carpenter to set up was our basement. We didn’t think this would disrupt our everyday lives. The carpenter promised to carefully clean and vacuum the stairs (which he did every day) so that we could use them while he worked. After the first week, bouts of uncontrollable sneezing gripped my family as if we’d caught terrible colds. After the second week, the stairs were done, but the sneezing continued.

The cause of the “colds” turned out to be sawdust. Specifically, sawdust that had caked the intake vents in the basement where our new stairs were being built! Once I thoroughly vacuumed the vents, the sneezing stopped.

Our carpenter did fine work and we are very satisfied with the stairs. This sneezing outbreak was manageable, but it also was unexpected.

A new reality from equity

As we’ve moved forward, we’ve already run into more unforeseen circumstances. I wanted to install a ceiling fan but the outlet had wiring I’d never seen. Storm doors (for those of you who don’t know) take a long time to put up; winter weather complicated that project too. Replacing our doorbell revealed that we had a transformer installed with our doorbell that also needed to be replaced, but for some reason, the transformer was mounted all the way up in the attic. So far, the issues we’ve run into have all gotten resolved. Some took longer to solve than others but the talks we had for years about adding to our home are finally becoming a reality thanks to our home equity.

Your mortgage. Your way.

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