Published: Planning for Your Home - Blush Magazine, March 2012

by Marissa Corbitt

Planning For Your Home

Having a beautiful home that is inspiring and comforting to you and welcoming to your guests is important, but getting your home to that point takes planning and patience.

Develop a Plan
First, form your ideas, goals and dreams for your home and determine the importance of each different project. Second, develop a budget, then follow through and stick to it. Have patience that you will find the items you are looking for in the price ranges you have set. Third, be sensible when considering the cost of home repairs or remodels versus the market value of your home and the value of your neighborhood.

Secure Financing
Several financing options exist for major home repairs and remodels. A home equity loan and a home equity line of credit (HELOC) use the home's equity as collateral. These loans are also known as second mortgages because they are secured against the value of the property, just like traditional mortgages. A HELOC is a line of revolving credit with an adjustable interest rate, whereas a home equity loan is a one-time, lump-sum loan, often with a fixed interest rate. With a HELOC, the borrower can choose when and how often to borrow against the equity in the property, with the lender setting an initial limit to the credit line. The minimum monthly payment can be as low as the interest that is due. A HELOC is reviewed every three to five years. Although not as expensive as a first mortgage, a borrower can still expect to pay certain fees for this loan, such as appraisal and recording fees. If you itemize on your tax return, home equity loan interest can be deducted on your personal income taxes.

Think Creatively
Before beginning a remodel project, clear away clutter. Sell items that you do not want at a garage sale or give items to a local charity for a tax deduction. Make sure that you keep a receipt of your donation to the charity. Keep an open mind about items that can be remade or reused, such as lamps or furniture that can be painted or re-finished. And don't forget to be a bargain hunter! If an item will not be used long, try to find it at a reduced price. Save your money for other items that you know you will use for a long time. Have patience when decorating or re-decorating.

Having a beautiful home is important to many, but maintaining sound finances while making your house beautiful is equally important. Developing a budget, planning and acting with patience can make your dream home an affordable reality.

Click here to read the complete article on Blush Magazine's website.

The contents and opinions contained in this article are for informational purposes only. The information is not intended to be a substitute for professional accounting counsel. Always seek the advice of your accountant or other financial planner with any questions you may have regarding your financial goals.