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Vermont Real Estate

Building Equity in Your Home

 

Beautiful Executive Home in St. Albans

 

Buying a home is a great way to improve your family's financial security. The main way this happens is through home equity. What is equity? The equity in your home is the difference between its market value and the balance on your mortgage. In other words, equity is the wealth built up in your home over time. If you could sell your home for $400,000 and the amount you owe on your mortgage is only $100,000, then your equity is $300,000.

Equity is built in three ways: down payment, mortgage payments, and market gains. Making a down payment is a reduction in your mortgage amount, giving you instant equity in your home.

Making house payments increases your equity as well, since every payment includes a portion for interest and a portion that reduces the amount of your loan amount (called the principal). Over time the amount of your payment that goes toward the principal increases and helps to build your equity even faster.

You also build equity as your home gains in value over time; this appreciation in market value can mean that you build equity simply by owning your home. Of course there are no guarantees that real estate values will continue to rise, but historically this has been the case. If your home is worth $250,000 and the market appreciates by 5% each year then after just two years you could add $25,000 in equity simply by living there.

Equity doesn't have to be an abstract concept; you can turn it into cash by applying for a home equity loan which uses the equity in your home as security and in many cases allows you to deduct the interest from your taxes, just as you do with your first mortgage.

Home equity loans are usually a cheaper source of funds than other types of credit (credit cards, for example) and can be an excellent way to pay for home renovation or to consolidate debt.

If you are considering buying a home, one of the first steps will be applying for a mortgage. Check out our Mortgage Application Checklist for tips on getting started. To apply for a mortgage or if you have questions about the entire process, we recommend contacting The Mortgage Guys at Spruce Mortgage. Visit them on the web at www.vermontmortgageguys.com.

What Are Ice Dams?

 

Ice Dam

Ice Dam

 

What is an Ice Dam?

An ice dam is essentially a group of oversized, heavy icicles hanging from the edge of a roof that develop when snow on the roof melts and then refreezes near the gutters. They make look cool, but more often than not, they cause damage to roof shingles, which can in turn devalue your property or cost you thousands of dollars in roof damage.  The most common causes of ice dams are inadequate insulation in the home and poor roof ventilation.  Ice dams most often occur in ranch style houses or houses with low roof slopes and large overhangs.  They occur when snow is present on the roof and the outside temperature is below freezing (pretty much a given for us here  in Vermont!) Homes with poor insulation allow heat to escape from the living quarters into the attic. If the roof system is not properly ventilated, the heat will build up in the attic and warm the roof deck, melting the snow above. When the melted snow reaches cooler roof areas, usually the gutters or areas near the overhang (eaves) it will refreeze. This freeze-thaw process can damage shingled roofs since the ice can travel "upslope" and get underneath the shingles.

Prevention and Protection

Installing new shingles alone will not prevent ice dams.  Prevention only occurs when the entire roofing system is addressed, including attic insulation and roof ventilation.  Ideally, the temperature in the attic space should be close to the same temperature as the outside air.

Adding insulation to your attic will minimize the heat that escapes from the living space into the attic.  Additionally, electric outlets, plumbing vents, furnace stacks, and bathroom vents can allow heat to escape into the attic.

Proper roof ventilation allows that heat to escape and prevents your roof deck from warming.  The freeze-thaw process that results in ice damming is unlikely to occur on a roof that is properly ventilated.

Underlayments protect the roof deck from ice dams by creating a water-tight barrier between the shingles and the roof deck, but do not prevent ice damming from occurring.

Shoveling Your Roof

It is also important to keep your roof free from heavy snow during the winter months to prevent ice damming, as well as, worst case scenario, a roof cave in. Please be very careful if you decide to take on this dangerous job yourself! You could use a roof rake, but be careful not to damage your shingles. I wouldn't recommend climbing up on the roof yourself, so it's best to hire professionals who have prior experience with this task and who are insured in case of any accidents. Contact us and we'd be happy to recommend a  local, quality roofer, contractor or handyman to help you clear the snow and icicles off your roof this winter!

Our New and Improved Website!

We are very excited to announce that finally our newly designed and improved website for Geri Reilly Real Estate has officially launched! Same web address as before, but a totally new look and all sorts of new features! Please check it out and let us know what you think!

www.BuyVTRealEstate.com

Featuring:

We hope you like our new site! Feel free to leave a comment and let us know your thoughts...

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