The actual share of your property you actually own, better known as equity, is a financial benefit to any homeowner. It means more profit when it’s time to sell or it can offer you cash when you need it. This can be done either through a refinance or home equity loan.
Fortunately, building equity can be easy. Every month you increase your home equity by making your mortgage payment.
If you want to build your equity even further, there are several ways to do it, including:
- Buying in an up-and-coming market. If home values in your neighborhood start to rise, so will your property value. That can mean more equity, too.
- Increasing your down payment. The more you put down, the less your lender will need to loan you, and the larger your equity stake will be.
- Paying more on your mortgage. Putting extra toward your mortgage loan — either each month or a few times a year — can help you pay down your balance and increase your share. Consider putting your annual tax refund toward your loan to really make a dent.
- Renovating your home. Anything that improves your home’s value also increases your equity. Choose your projects wisely, and reach out if you need some help getting started.
- Refinancing your loan. With a short-term loan, like a 15-year, you can pay down your balance faster (and sometimes get a lower rate as well). This can help you build equity more quickly.
Do you have questions about home equity? Or are you planning to buy or sell property this year? Reach out today.