The fact that home values have been steadily dropping for the past 2 years is bad enough, but now we are all starting to face the cold hard facts that over inflated house prices are the result of over zealous mortgage lenders and financiers that got greedy. Over the past 7-8 years, the mortgage industry started to loosen the requirements for a mortgage in order to keep up the steady pace in the housing market, banking on the fact that the housing market would continue to appreciate. As we are now learning, this is not the case. More and more homes are being sent foreclosure. While the banking industry is being bailed out by the government, the average hard working homeowners are not and are in jeopardy of losing their homes.

If you are not upside down on your mortgage, consider yourself one of the lucky ones. Whether you are upside down or not, there are ways to improve the equity ratio in your home without dumping a lot of your hard earned money into your house. While the financial investment may be minimal, there will certainly be a lot of sweat equity required.

As we all know, there are certain rooms of the house that are going to add the most return on your investment. The kitchen and bathroom are by far going to yield the highest return on investment in most cases. Depending on the age of your home, a simple update may be all that is needed to increase the value of your home. In other cases, an entire gut and remodel be needed, or an addition/expansion. Whenever possible, it is important to get the most out of the square footage that you have, if you are looking to add value to your home.

Regardless of your layout constraints, the more work you can put into it yourself, the more value you are going to add for the least amount of monetary investment since labor is a huge part of any renovation budget. So what exactly can a novice home owner take on themselves? You certainly don't want to mess with any plumbing or electrical issues unless you have some experience with it (leave that to the experts). Tearing down walls or building new ones isn't that hard, but it is best to have a professional give some guidance.

Let's take a look at something simple.. do you own a flat head screw driver? If not, you shouldn't even be considering taking on a project by yourself. If you do, then you can actually assemble your own kitchen or bathroom cabinets. New cabinets can be very expensive, but there has been an insurgence of RTA cabinets on the market that allow homeowners and builders to save a significant amount of money on new cabinets by assembling them themselves. I have been using them for years, and they really do just require a screwdriver. When it comes to installation, it really isn't as hard as you may think. By following a few easy steps, you can have new kitchen cabinets installed in no time.

When it comes to countertops, that is something that should be left to professionals, unless installing a tiile countertop or something similar. Flooring is another easy project that you can tackle with the new types of laminate flooring that is on the market these days.

So when it comes to protecting the single largest investment for your family, it is important to add as much equity to your home without pricing it out of the market. By updating some key features of your home, you can ensure that you are getting the most value out of your property.