Home Equity 101

Dated: April 4 2018

Views: 564


What is Home Equity? Home equity is the difference between what your home is worth and the amount you owe on your home. If your home valued at $150,000 and you owe $100,000 on it, then your home equity is $50,000.

Market Forces: The real estate market has a say in your home equity. As home values rise, so does the equity in your home.

Improvements: Typically home improvements and remodeling can raise equity (such as remodeling the kitchen, adding a bathroom, or adding a deck). You are making your home more valuable. However, not all improvements raise equity and that is something to think about more spending a lot of money in a renovation that will not give you a return (such as going overboard on landscaping, converting a garage into a family room, taking out a bedroom, adding a pool, or adding very personalized colors and finishes.)

Paying Down: Paying down your mortgage quickly, especially if extra payments are going towards the principal, will slowly increase your home equity as well.

 

What Can You Do With Home Equity? Home equity is considered an asset. You can also borrow against your home equity, typically at pretty low rates, usually for things such as home remodeling or college costs.

Latest Blog Posts

Why a Real Estate Professional Is Key When Selling Your House

With today’s real estate market moving as fast as it is, working with a real estate professional is more essential than ever. They have the skills, experience, and expertise it takes

Read More

A Key To Building Wealth Is Homeownership´╗┐

The link between financial security and homeownership is especially important today as inflation rises.  But many people may not realize just how much owning a home contributes to

Read More

What Does the Future Hold for Home Prices?

What Does the Future Hold for Home Prices?If you’re looking to buy or sell a house, chances are you’ve heard talk about today’s rising home prices. And while this increase in

Read More

Early October is the Sweet Spot for Buyers

Are you looking to buy a home? If so, we’ve got good news for you.While there’s no denying the housing market is having a great year, many of the headlines are focused on 

Read More