6 Major Factors That Can Impact The Value Of Your Home

The value of a home is a crucial factor to consider when buying or selling a property. Numerous factors determine a home’s value and can fluctuate depending on the economy, its location and condition, current market conditions, and more.

Below, learn about six factors that influence property value and available programs for if you’re looking to improve your home’s value before selling.

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What Factors Impact Home Value?

1. Location
The location of a home can negatively impact its value if it’s located in an area with high crime rates or limited access to shopping, or positively impact value if it’s in a good school district or near amenities. However, the amenities buyers value will depend on their lifestyle; some want to be near entertainment or public transit, while others seek oceanfront or remotely located properties.

2. Property Size
Property size — both the home itself and the property it sits on — is a major factor that can impact a home’s value. While a larger home often has a higher value, the land it sits on can be worth a lot to the right buyer — particularly if it has a nice yard and amenities, such as a pool, deck, or access to nature.

To compare the costs of properties in a neighborhood regardless of size, look at the home’s value per square foot.

3. The Economy
The fluctuations in the economy, particularly an increase in demand for jobs, can transform a neighborhood and impact the value of properties located in the area. Nearby homes and businesses often increase in value in areas that see an influx in job creation since they are near a desirable area with new amenities and employment opportunities. This can attract people of all different income levels.

4. The Housing Market
The housing market ebbs and flows, greatly impacting a home’s value. Supply and demand in the market, the state of mortgage rates, and whether it’s a buyer or seller's market can impact the value of a home. For example, a short supply of houses on the market will increase home values.

Additionally, when a comparable house nearby sells for a higher price, the market will reflect that value, which can increase the value of other homes in the neighborhood.

5. Age And Condition Of The Home
Up-to-date appliances and luxuries in a home will come at a higher price tag for buyers. A home with modern features — such as a home office or a layout conducive to working remotely, ample parking, or an open floor plan — will be worth more.

In addition, the age of a home and how well it’s been maintained are factors in determining value. Generally, a newer home has a higher value than an older property because it requires less immediate maintenance and may cost less to insure.

6. Potential For Renovation
Having great renovation potential is a big draw for many buyers — and may be worth the higher price tag — as it provides flexibility to create a home personalized to each individual’s needs. Buyers may be looking to do renovations, such as adding a pool or outdoor lounge space, or they might consider expanding the house with an additional room.

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How To Improve Your Home’s Value Before Selling

In addition to the above factors, making well-thought-out and strategic improvements to your home before selling can increase its value and help you get your money’s worth — though the value of these improvements may vary based on the location of the property.

Worthwhile and cost-effective improvements that help increase your home’s appeal and value include modernizing or remodeling your kitchen and bathroom, improving landscaping and planting trees, adding a new steel front door, installing energy-efficient lighting and stainless-steel appliances, and painting.

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Using A HELOC To Help Fund Your Home Improvement Project

Homeowners can fund their home renovation projects by tapping into their home equity through a Home Equity Line of Credit (HELOC).

With a HELOC, homeowners don’t have to rely on savings; instead, it’s a revolving line of credit that uses an asset you’ve been paying into as collateral: Your home. To determine how much a credit lender will offer, you need to know how much equity is in your home. Calculate this by taking the value of your home and subtracting the amount you owe on your mortgage.

Borrowers can withdraw funds through a HELOC repeatedly in separate transactions, as long as they pay off the borrowed amount, plus incurred interest. Taking out funds as a lump sum is not required, and instead, borrowers can take out only what they need to avoid additional interest. Borrowers can use the funds in a number of ways, from financing home improvements to paying for large expenses or continuing education.

If you're interested in applying for a HELOC, New American Funding can help. Applying is simple; answer a few questions through the easy-to-use New American Funding portal and be on your way to accessing the funds you need.

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New American Funding Offers Options To Help You Buy A New Home

For homeowners who have prepared their house for the market and are now ready to buy a new one, New American Funding offers several programs to help, including:

● NAF Cash* — NAF Cash, an affiliated company of New American Funding, will purchase your dream home upfront with a cash offer, which tends to be stronger in the eyes of sellers and could help you save on the purchase price. Then, you can purchase the home back at the original price (plus a minor convenience fee).

● 5-Year Rate Protection Pledge — The 5-Year Rate Protection Pledge locks in your interest rate at the time of purchase. Should interest rates drop anytime within the five years, you’ll have the option to refinance at a lower rate without any repeat fees.

● Buydown Loan — The Buydown Loan program allows homebuyers to make lower initial payments for the first few years — up to three — on their 30-year mortgage, so they can start their homeownership journey sooner while continuing to save money.

If you have questions about any of these programs, Loan Officers at New American Funding can help provide you with individualized assistance.

New American Funding’s breadth of programs and exceptional customer support help ensure a positive experience for anybody looking to make the jump from prospective buyer to homeowner. In 2022, New American Funding was recognized as #1 in customer satisfaction among mortgage servicers by the J.D. Power 2022 U.S. Mortgage Servicer Satisfaction Study. The company was able to achieve this prestigious recognition through its dedication to helping every client from every background achieve homeownership.

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Whether you’re looking to apply for a HELOC for renovations or to begin the process of buying a new home, New American Funding can help you finance the next chapter in your life. Contact a Loan Officer today to get started.

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*NAF Cash is fulfilled by NAF Cash LLC, an affiliated real estate company of New American Funding that is managed and operated in compliance with applicable legal and regulatory requirements. NAF Cash LLC does not originate loans or issue loan commitments. Terms and Conditions apply. Not available in all states. MI Real Estate Broker #6502431375. 41050 W 11 Mile Rd, Suite 220, Novi, MI, 48375. Phone 844-344-0531.