Now that the real estate market is showing signs of upward movement, some people will be thinking about upgrading. A lot of folks sucked it up during the downturn and now they want a bigger home for their kids, a better location for a shorter commute, or a smaller property to keep maintenance down.
Before you sell, your home probably could use some improvements to garner as much buying interest. The dilemma is: How much more cash are you willing to tie up in your home? Imagine plopping down $10,000 to remodel a bathroom and nobody ends up buying the place for your asking price? You don’t want to be house rich but cash poor.
With this in mind, you might consider taking out a HELOC or doing a cash out refinance instead to release some equity in order to make home improvements or fix necessary things such as a leaky roof.
Whilst this in itself is not a bad idea, it pays to consider all options and consider if releasing equity will damage the prospects of re-mortgaging for your new property.