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Remodeling activity remained steady in the fourth fiscal quarter of 2006, according to the National Association of Home Builders’ (NAHB) Remodeling Market Index (RMI).

What this means in local terms is that Florida home improvement loan activity is not sagging off as much as traditional home purchase loan demand.

The current index edged up slightly from 47.8 to 48.2 on a seasonally adjusted basis and future expectations moved up to 46.0 from 45.4. The RMI measures remodeler perceptions of market demand for current and future residential home remodeling projects.

“Remodeling retained strength across most of the country compared to late last year,” said NAHB Remodelers Chairman Mike Nagel.

“Certainly regional economies and housing markets play an important role, but overall we see maintenance of high levels of remodeling activity and solid future prospects.”

The RMI component for the rental market indicated a stronger than expected increase in activity for that sector in the fourth quarter of 2006.

The current conditions index for renter-occupied markets increased from 38.8 to 44.1, while current conditions in owner-occupied units decreased from 51.4 to 49.7 in terms of remodeling demand.

At a time when Florida mortgage rates have remained steady, future expectations for the renter-occupied units also grew from 37.1 to 42.4, and owner-occupied units edged up from 45.0 to 45.6.

“Though the substantial reductions in home sales and new housing production have impacted the remodeling market to some degree, we feel that remodeling of both owner-occupied and rental housing will remain strong compared to other areas of the industry,” said NAHB Chief Economist Dave Seiders.

“With record levels of owners’ home equity and a constant need to upgrade the older housing stock, the remodeling outlook appears quite good for years to come.”

Regionally, the Southeast reported the most growth as current conditions increased to 52.8 and future expectations moved up to 51.1. While the slumping of the Florida housing market has been widely reported, this indicates record amounts of equity waiting to be tapped.

The current conditions in the West grew to 52.4, but future expectations fell to 51.3. In the Northeast, current conditions moved down to 45.7 while future expectations increased to 50.1. Only the Midwest showed declines in both, with current conditions decreasing to 44.4 and future expectations lowering to 35.7.

The RMI is based on a quarterly survey of home remodeling professionals, whose answers to a series of questions were assigned numerical values to calculate two separate indexes.

The first index gauges market conditions based on remodelers’ reports of major and minor additions and alterations, plus maintenance work and repairs, on both owner- and renter-occupied dwellings.

The second index gauges expectations for the near future and is based on remodelers’ reports of their calls for bids, amount of work committed for the next three months, job backlogs and appointments for proposals. This can be considered a gauge of future Florida home equity loan activity.

While demand for Florida home loans in general has lessened in the state, there is good news for the remodeling industry:

The largest, most comprehensive study of Baby Boomers found that a majority of those 50 and older plan to stay in their current homes for the foreseeable future and plan improvements or remodeling.

This means an increased number of Florida home improvement loan applications are probably on the way.

Contrary to expectations that people plan to downsize their home after children leave the nest, a new study indicates that life changes common to those over 50 - retirement, the birth of a grandchild or caring for an elderly parent - are often triggers for projects to improve home comfort and functionality in anticipation of spending more time at home.

“Due to real estate taxes - here in Florida, many people will pay higher taxes even if they move to a smaller place - many of our clients are choosing to remodel and remain in place,” said Bill Feinberg, president of Allied Kitchen & Bath, a remodeling firm in Fort Lauderdale.

Florida home improvement loan study

The study was done by New York-based Focalyst, a joint venture between AARP Services Inc. and Kantar, a research and consultancy firm. The study, which gathered data from more than 30,000 consumers from the Baby Boomer generation and older, was sponsored by Atlanta-based Home Depot as a way to gain insight into the housing preferences and home improvement needs of these potential customers.

“The Baby Boomer generation [those born from 1946 to 1964] holds the greatest discretionary economic wealth in the country, and what better target audience is there for any retailer,” said Pat Wilkinson, senior director of marketing for Home Depot.

Among the key findings of the study:

- Sixty percent of those 50 and older expect to live in their current residence during the next five years; this isn’t a group that takes out more Florida mortgage loans past a certain age.
- Two-thirds (65 percent) of them plan to remodel or improve their homes.
- Nearly three-quarters (73 percent) say the kitchen is the most important room in the house.

Although the remodeling market slowed in the second quarter of this year, according to the National Association of Home Builders, it’s still poised to improve based on favorable demographics, the high cost of housing and the lack of tax portability - factors that discourage homeowners from moving, even to a smaller residence.

Baby Boomers, the wealthiest generation in history, are responsible for a majority of the remodeling projects in the market now, and many of those projects involve “universal design” that will allow homeowners to age in place.

These projects include installing slide-out drawers, elevated dishwashers and varying countertop heights in kitchens, as well as higher toilets, shower seats, grab bars, motion-sensing faucets and lever handles, rather than knobs, on faucets in bathrooms.

There may also be a surge in Florida home equity loans in order for these owners to free up cash for such projects.

What if you’re in retirement and in need of a Florida home improvement loan? Such a question was recently raised by a 64-year old individuals interested in around $75,000 worth of upgrades.

The owner said he possessed $300,000 in home equity and wanted to refinance with an interest-only Florida home mortgage in order to keep payment low. From there, perhaps a reverse mortgage or IRA monies were proposed in order to pay the taxes on that distribution?

Here’s the advice he received:

As a married, retired owner withh an annual income of about $45,000 per year and excellent credit, this individual owns a house worth approximately $550,000. There is about $200,000 in outstanding Florida home loan debt on the home.; and about $150,000 in retirement accounts.

Now, lending limits on the two main reverse mortgage programs, HECM (Home Equity Conversion Mortgage) and Fannie Mae Home Keeper, won’t let you receive a $275,000 reverse mortgage. That’s because the first step in getting a reverse mortgage is to pay off any existing mortgages with the proceeds from the reverse mortgage.

It’s an expensive way to tap the equity in your home, anyhow.

Instead, what about a home equity line of credit? Granted, because it’s a variable-rate loan, you are taking on the risk that short-term interest rates continue to head higher. However, there are two reasons why a HELOC could work in this situation:

1. The payments are interest-only in the early years of the loan
2. Closing costs are minimal

The downside is the national average interest rate on a HELOC is currently 8.21 percent.

A cash-out first Florida home mortgage can also make sense if the rate is competitive with the rate on your existing mortgage. The national average for a 30-year fixed-rate mortgage is currently 6.49 percent. Saving 1.72 percent versus the HELOC rate can justify paying the higher closing costs.

Although it’s not interest-only, the extended loan term on the $275,000 loan balance should make the payments affordable. As you can tell, there are many variables to consider. Discuss your options with out Florida mortgage brokers today and we’ll make sure you arrive at the proper conclusion.

As sellers encounter a lack of Florida home mortgage enthusiasm, many look to renovate their abodes. The thinking makes sense: pretty up my residence and people will flock to it. Such enhancements will also increase the home’s value.

Not always, however. If you own a fixer-upper, or any type of house, think twice (or three times) before making the following changes. They could actually bring down the price of your home.

The Swimming Pool

In some areas, especially hot-weather spots such as Arizona and the Florida housing market, a pool is a must-have. In the Southwest, adding one boosts your home’s value by 11 percent on average, according to a National Association of Realtors study.

But elsewhere it can just as easily turn off buyers. How is this possible? Many will worry about affording the upkeep and insurance. Moreover, if the potential buyer has a family with small children, think long and hard before installing a pool.

“People with younger children may be leery of houses with pools for safety reasons,” says Barry Graziano, a real estate agent with Prudential Rand Realty in White Plains, N.Y. “I’ve had families walk away. A pool can cut down on the number of people who will want to buy your house.”

The Addition

It’s true, that great room and master bedroom wing will let the family spread out. But what you probably haven’t considered is what the space will look like from the outside.

“A badly designed addition can kill your resale value,” says Sal Alfano, the editorial director of Remodeling. “People focus on the floor plan and the flow, but not on how it fits into the neighborhood or even the house itself.”

Watch out for boxy, poorly detailed additions. Proportions matter.

Trendy Finishes

When you invite potential Florida mortgage loan applicants into your open house, be careful of a style that will look dated. Spotting the trend that’s on its way out is trickier than you think. While it’s easy to assume that sleek red European kitchen cabinetry is tomorrow’s harvest gold fridge, for example, other design staples that seem like sure bets can quickly drift into obscurity, too.

That’s what Mark Johnson, a Whirlpool design manager, says is happening to stainless-steel appliances. “For a period of time, people aspired to a commercial kitchen,” he says. “What I am seeing is more interest in warmer finishes.”

You want a design trend with legs. Johnson says custom panels that dress appliances in maple or mahogany finishes are likely to remain popular for several years.

The Jacuzzi

We know, we know: how can a hot tub ever be a bad thing?!? Won’t this increase the chance of a home sale? But while an elaborate master bath is okay, a big circular tub with 15 jets that can pulse or massage is risky.

According to Holly Slaughter, brand manager at RealEstate.com, you’re better off with an oversized shower that has a rain showerhead and multiple jets. Busy boomers have little time to spend hanging out in the bathtub, and parents with small kids prefer a conventional tub.

This may seem like small notes, but sellers need every advantage they can get in the current, buyer’s market. Studies show that you have a better chance at finding Florida home loan applicants and meeting your asking price if you avoid these four renovations.

As most prospective buyers are aware of, Florida mortgage rates are currently in the mid-6 percent interest range. This could makde it difficult to afford the larger homes they could’ve purchased 12 months ago.

But what about fixer-uppers? These pieces of property can be the solution for home buyers willing to buy a less-than-perfect house. The key, of course, is to focus on long-term profit potential. You may need a Florida home improvement loan to accomplish such a goal, but those aren’t hard to come by.

Choosing the right type of home

Experienced real estate investors recommend buying a property “with the right things wrong.” In other words, you should focus on a house or condominium where well-spent dollars will add lead to more market value down the line than the cost of such renovations.

For example, fresh paint, inside and outside, is known as the most profitable home improvement you can make. Virtually every house can benefit from this enhanced look.

Other suggested home improvements include adding a second bathroom to a one-bathroom house, installing new light fixtures, adding fresh landscaping, and installing new carpets or hardwood floors. These are known as “cosmetic improvements” because they usually aren’t very expensive - but they can give the home a new look and feel, causing that Florida home mortgage you took out on it to be well worth the cost come selling time.

Be wary of useless home improvements. Smart buyers of “fixer” homes avoid misallocating their money and going forward with expensive improvements that add little or no market value.

The best example of such spending is a new roof. When you spot a house for sale that has curled-up shingles, it’ll probably leak soon if it hasn’t already. If you buy that house and deduct $5,000 (for instance) for the cost of a new roof, you’ll be lucky if spending that cash a new roof equates $5,000 in market value. More likely, it won’t add any value because home buyers expect houses with roofs which don’t leak. You’ve gotta think ahead.

Think about marginal improvments. In addition to the “profitable” and “unprofitable” home fix-up work, the third category is known as “nice to have” marginal improvements.

If you plan to use a Florida mortgage loan on a residence you’ll remain in for at least five year, you probably want to make these renovations simply to increase your own enjoyment. But consider yourself lucky if they add as much market value as they cost.

The two major examples are kitchen and bathroom renovations. Room additions, such as adding a family room or another bedroom, also fall into this category. Adding a swimming pool, surprisingly, can often hurt the marketability of a home because buyers with small children frequently won’t even consider this sort of danger.

When should you sell your fixer-upper? Among the reasons fixer-upper houses and condos become available are (1) distress properties such as foreclosures, (2) the seller doesn’t want or can’t afford to fix up, (3) an heir inherited the property and wants a quick cash sale, and (4) a well-located but run-down house has become a “tear down” on a valuable lot to be replaced by a brand-new house.

Home sellers who don’t want to be bothered fixing up their homes for sale usually pay the penalty in a greatly reduced sales price. But buyers willing to consider Florida home loans on these kinds of purchases could make out very well in the deal.

If you or your mate enjoy home decorating, buying a fixer house or condo can become a profitable, tax-free business. Thanks to Internal Revenue Code 121, primary-residence owner-occupants can earn up to $250,000 tax-free profits upon resale - it’s a pretty major tax benefit of home ownership.

To qualify, you must own and occupy your principal residence at least 24 of the 60 months before its profitable resale. If this is the case and you follow the proper steps, a financial windfall could come your way.

You possess good credit. You wish to apply for a Florida home mortgage loan. But you can only afford a house in less than ideal condition. Or perhaps you wish to purchase an older piece of property in order to “flip” it for an investment.

Any of this sound familiar? Those contemplating home repairs/improvements/remodeling might not want to charge the money for costs on their credit card - minimum monthly payments and interest rates have been sky-rocketing.

Instead, consider a Florida home improvment loan or any of the following ways to tap into your existing equity in order to finance this fixer-upper:

Cash-Out Refinance
Receive cash from your home equity via Florida home loan refinancing for more than the balance you owe. For example, if your existing mortgage balance is $100,000, you could refinance into a new mortgage for $150,000. You still owe the $100,000, but you’d have another $50,000 to use for the home improvements.

Home Equity Loan
Apply for a second mortgage on top of your existing one. A Florida home equity loan supplies you with a lump sum of money that’s good to use for a one-time big expense. This is also a viable way to get cash from your home equity, especially if you’ve hired someone to do the repairs and plan to pay them all at once.

Home Equity Line of Credit (HELOC)
How about a home equity line of credit (HELOC). A HELOC is also a second mortgage, but instead of one lump sum of cash, it works more like a credit card, taking advantage of your equity as your line of credit. You can draw from it anytime you need to and pay it off as you use it.

Benefits of Using Your Home Equity
So, why should you access your home equity to get cash for a fixer-upper? Consider the following benefits:

1. The interest you pay on a Florida home equity loan is usually tax-deductible, unlike the interest on a credit card.
2. Moreover, the interest rate you could get on a Florida mortgage loan is lower than the rate you get on a credit card.
3. There are various ways to save. Thanks to many different loan options available these days - some with interest-only payments built into them - you’re only required to pay the interest portion of the monthly payment. This kind of flexibility could make it even easier for you to handle paying for those home repairs.

Remember: if your new house needs repairs, but you don’t have the money on hand, there are steps that can easily be taken. Don’t abandon your dreams - let us help!

As demand for new houses and Florida home loans slows down, one result is that a majority of home owners are choosing to remain in their current abodes. They just wish to fix them up a bit. Therefore, the home renovation is actually growing stronger within this scenario.

According to the Home Improvement Research Institute, those who have lived in a house for two years or less spend an average of $2,300 yearly on it. The longer people stay, the less they spend each year - $2,000 annually on average in years three through five and just $1,700 annually after 10 years.

HIRI surveyed 600 new home buyers and 600 existing home buyers, finding that most movers did at least one improvement project soon after they moved in. The main projects involved landscaping. (Residential builders often give new buyers an allowance to spend on their own landscaping rather than putting in a standard lawn package to start with.) After the yard, decks and patios were the second most popular project for new home buyers.

For many home buyers, remodeling work gets done on both ends of the deal, in preparation for the sale of a previous home as well as the remaking of the new house. Half of all sellers undertake some sort of renovation project, with 61% of those working before they even list the house for sale, 24% adding a project while the home is listed but prior to having an offer, and 12% having to make repairs or upgrades after an offer is made.

Kitchens, baths and bedrooms were the most popular targets of revamps for sellers, with painting and flooring the most common projects.

“House appeal” was listed as the No. 1 reason those surveyed by HIRI decided to remodel. But the survey didn’t distinguish whether the appeal was to the current occupants or to future buyers, or both. But the fact is, many homeowners today take investment value into account when considering any major home makeover.

“Home remodeling is the best way to protect what is for many their largest investment,” said Vince Butler, chairman of the National Association of Home Builders Remodelors Council, a trade group.

If you’re looking to sell and wish to elicit the highest Florida home loan offer, the group offers these tips for making investment-wise remodeling decisions:

• When searching for project ideas, look at amenities of other homes in the neighborhood. Building an addition may not be a sound investment if yours is the first on the block, yet it would be very wise to add should all the neighbors have one.
• Kitchens and bathrooms still count. These rooms are consistently rated the best places to spend your remodeling dollars. Potential buyers often look their first.
• One of the cheapest and easiest ways to add value is through a fresh coat of paint, breathing new life into a room for just a little money and some elbow grease.
• The exterior is your home’s first impression, so be certain that siding, paint, landscaping and any other outside areas look acceptable. Otherwise, you may not receive the Florida home mortgage loans that you were hoping for.

Good luck to all fixer-uppers. Whether you’d like your residence to look better for your own sake or for the next Florida home loan owner, these tips should help.

Spending an estimated $210 billion on residential remodeling in 2005, Americans shattered all previous marks in this field. This figure is based on the National Association of Home Builders‘ analysis of recently released third-quarter remodeling spending from the U.S. Census Bureau.

Looking ahead, this trend should continue. The NAHB Remodelors Council forecasts the largest increase in spending in 2006 in more than 10 years to a record $238 billion, a 13.2 percent jump.

“The devastating 2005 hurricanes, combined with a rebound in the rental market, are expected to spur a historically high increase in spending this year as repair work proceeds in the Gulf states and apartment owners renovate properties to maximize rental income,” said Vince Butler, chair of NAHB’s Remodelors Council and a home remodeler from Clifton, Va. “The massive owner equity and low refinance rates that fueled recent growth will continue to drive strong expansion.”

NAHB’s Economics Department recently analyzed the local economic impact of remodeling. For every $100,000 spent on additions and alterations, the local community receives $54,200 in income, $4,900 in taxes and other government revenue, along with 1.01 full-time local jobs.

“The $200 billion remodeling industry is almost exclusively small businesses that operate in local communities,” said Butler. “And we can now confirm that money spent on remodeling stays local.”

Regionally, the South accounts for 31 percent of all remodeling expenditures, with an average of $1,513 spent per household in 2004, the last full year of Census data. Moreover, the residential remodeling market accounts for approximately 40 percent of all home construction.

Many of these efforts take place in order to increase the value of one’s home. If you’re a seller looking to make money off a Florida home loan, improvements to your property may be the way to go.

As home values remain high - especially among those searching for a Florida home loan - the real estate market undergoes changes. When those prices make it difficult to sell one’s home, individuals are more likely focus efforts on their current property.

Enter one of the strongest and broadest recent trends: remodeling. The Joint Center for Housing Studies at Harvard reports that homeowners spent $149 billion in 2005 on renovations.

“People are investing in their houses,” says Steve Hockett of FranChoice, a business referral consultant. “And higher house prices have enabled them to do it.”

To meet the growing demand for all things home-related, such as remodeling, numerous enterprises have sprung up. Many are franchised. After all, who has time to do all the work required to maintain America’s growing homes? Americans are working longer hours, spending more time commuting and are more likely to have both spouses employed.

When owners look for help, it’s natural that they should turn increasingly to franchise businesses.

“Customers are more comfortable with a name they know,” says Hockett. The clout of multiple locations and ample advertising and promotional money heightens brand awareness for franchise owners.

Industry sources cite several other factors that have added to the boom in franchise businesses targeting homeowners.

“After 9/11, the home improvement industry soared,” says Tom Wood, president of Floor Coverings International, a franchise operation. “People started to focus inward more and as home prices climbed, they poured money from home improvement loans into remodeling.”

It’s also natural that high home prices would prod homeowners into plowing some of their equity back into home repair or improvement as a way of protecting or enhancing their investments.

And don’t discount all the media attention that all aspects of home design and improvement have been drawing. TV shows, such as “Extreme Makeover: Home Edition” and “Trading Spaces” has helped focus the nation’s attention on the home and created an atmosphere of lust for lush lifestyles.

“Home shows have been a great boon to housing remodelers,” says Jason Baldner, president of Kitchen Solvers, a franchise kitchen and bath remodeling company.

In conclusion, maybe you don’t need a new Florida home loan after all. Perhaps fixing up your current property will be enough to make it feel new.