Home equity is the difference between what your home is worth and how much you owe on your mortgage. It is extremely important for a variety of reasons.
For homeowners, this accumulation of wealth is one of the perks of purchasing over renting. Each month, mortgage payments build equity. In the last few years, home prices skyrocketed. Chances are your equity grew significantly during this time. In fact, CoreLogic’s Insights report found that the average borrower with a home loan has nearly $300,000 in equity right now. But how can it be used? Keep reading to find out.
First, it can power a move into a home that fits your changing lifestyle. If you are looking for a more spacious floor plan, it may be time to upgrade. Or have the kids left home? You may consider downsizing. If you upgrade, it can be put toward a down payment. Conversely, if you downsize, it may cover some — or all — of the cost of your new house.
Next, you can use equity to reinvest in your current home. This is a great option if you desire changing up some things in your house, but aren’t quite ready to make a move. Home improvement projects allow you to customize your home to your liking. However, be cautious to research which projects have the largest ROI for when you do sell. New or refinished hardwood flooring is always on the top of the ROI list.
Another thing equity can help with is the fulfillment of your personal life goals. You could use the money to invest in a new business venture or fund your child’s education. You could retire or downsize. The options are virtually endless — just don’t use it for unnecessary spending.
Your line of equity could be a potential game-changer. If you don’t know how much you currently have in your home, no problem. Contact your local real estate specialist at SurterreProperties.com today to find out.
Source: KeepingCurrentMatters.com
