The Market Has Suffered
As most of us know, the housing market had a steep decline beginning in 2006, and since then, has been referred to as a crisis. Many people suffered through the crisis, and others had to succumb to the reality of foreclosure. It was a struggle for most and for others, an absolute tragedy. The market has had ups and downs in the years following the market fall, but now things are starting to look up. Not only for the Denver real estate market, but all over the U.S., people are seeing improvements and more buyers in the market.
How to Handle the Changes
Even if things are looking up, the market will show change, and sometimes that’s scary for all of us. The following is a list of the 5 things you can do to protect yourself and your home in this real estate market:
Use Equity Wisely
It’s important to use your line of equity when your credit and work status are both in good standings. If you’re planning on using your line of equity on your residence, make sure you do so when you have the credit and employment to back that decision up.
Don’t Use Too Much Equity
In a growing and changing real estate market, it’s important to have a fail-safe. In these times, it’s best to ensure that a minimum of 20-25% of your home equity is available to you for cash purposes. This will be a safety net, in case things get rough during the coming months or years. If, for any reason, must sell, you will have access to a cash fund to get you through the roughest part.
Familiarize Yourself With Your Mortgage
There’s nothing more important than fine print, when it comes to large purchases. Buying a house is nothing short of intense, when it comes to the buying process. As a homeowner, it is your responsibility and right to know the terms and conditions of your mortgage agreement. This is crucial, so make sure you do know your mortgage.
Use Your Loans to Your Advantage
You can use loans in your favor as a homeowner. When the market gets a little shifty and things get a little uncomfortable, refinance your loan to remove some of that tension. However, be sure to not leverage against your property too much when using this technique.
Manage Rent Changes Slowly
If you are in an area that is experiencing an up-side of the market changes, be sure not to lower rent rates too quickly. This is a good way to get yourself in a bind. If you are an owner of multiple properties and you are renting them out, be sure not to lower your rent rates more than 15% to start with. Even 15% is a fairly steep drop, the best is to shoot for about a 10% decrease in rent charge. Check the surrounding properties for competitive rates, as well.