Selling Your Home - Equity and Your Loan

1. Selling Your Home - Equity and Your Loan If you have enough equity built up in your home and you are not using your home to live on now, you may consider selling your home. This does not have to be your last home. Real estate values are always going up and a home bought today will most likely be worth much more in a few years. But before you put your home on the market for sale, find out first where you can sell your home and how much it will fetch you. With today's economy not seeing too many good opportunities in selling homes, here are some ideas you can use to help sell your home without sacrificing your finances. Selling your home with equity covered by your home equity loan is a wise option if you need a bigger amount of money to fund the down payment on a new house or if you just want to exit the current home for better reasons like relocating, taking a vacation or cashing in on a great real estate opportunity. Using this method requires that you put aside cash each month to cover the interest payments for the loan and any other expenses for selling the house. You should only use this cash for personal expenses or bills. This can really add up if you let it. You may also want to set aside a little bit of cash each time your equity grows to help ease the stress of not having enough cash to fund a large purchase such as buying a new house or buying a bigger and more expensive house. Selling real estate by using a real estate agent or a professional who is experienced in selling homes will fetch you the best deal. You can find these types of agents through your real estate agent, in the phone book, newspaper ads and on the Internet. Some agents will work on a commission basis, which means they get a portion of the sale price as their cut. While some agents make all their money from a fixed percentage for selling a home. If you plan to sell your house yourself, you can take some courses or learn to sell a home yourself to brush up on the selling techniques and to make sure you are educated in real estate law and the real estate market in your area. The second option is to try to sell the home yourself. This can be very challenging because there are laws that govern how much you can charge for selling your home. In many areas the value of the home must be greater than the fair market value. This fair market value is based on the average sale price for similar homes in your area. If your home sells for more than the fair market value, you will not get your full equity back. It's just like renting but instead of getting paid a percentage of the rent, you get paid an equal percentage of the sale price. If you are trying to figure out how much your home equity will be when you are selling, you need to look at several factors. One factor is the opening and closing costs associated with selling your home. These include repairs and improvement costs. Another factor that is figured into the home equity when you sell is financing charges, like your loan. And of course, like any loan, your closing costs and loan interest will add up. In addition to your home equity, you may also have third party or other equity loans. Some lenders put a small cap on the total amount of equity they want to add to your home. You can add as much as one hundred percent of your equity to these third party loans. These

2. third party loans are referred to as a HELOC. A home equity line of credit is something else that may be available when selling. It is a loan that can be used to finance any number of things, including home improvements, vacations, higher education costs and debt consolidation.