If you’re a homeowner, odds are your equity has grown significantly over the last few years as home prices skyrocketed and you made your monthly mortgage payments. Home equity builds over time and can help you achieve certain goals. Home equity growth is the simple equation of payments on time + natural market growth + time. Your payments move your current loan principle down, the market demand moves the value up based on what others would be willing to pay for your house, and over time you see the difference between what you owe on your house go down and what the value is going up which all equals Home Equity.
So how do you use your home equity to create stability or build wealth?
>>1. Buy a Home That Fits Your Needs
If you no longer have the space you need, it might be time to move into a larger home. Or it’s possible you have too much space and need something smaller. No matter the situation, consider using your equity to power a move into a home that fits your changing lifestyle. You can either pull equity to start the building process using a Home Equity Line of Credit (HELOC) loan or even a cash out refinance on a long term that you will pay off in the near future. You could sell your current home then repay all the loan or hold it as a rental (some restrictions may apply) and build your real estate portfolio.
A Be My Neighbor Loan Officers can help you figure out how much equity you have and how you can use it toward the purchase of your next home.
>>2. Reinvest in Your Current House
According to a recent survey from Point, 39% of homeowners would invest in home improvement projects if they chose to access their equity. This is a great option if you want to change some things about your living space but you aren’t ready to make a move just yet. But think of this way too – Home Equity is an opportunity for you to update your home now while you live in it and can enjoy it currently. In a recent survey as reported by Realtor.com – 60% of Sellers in 2022 were going to update their home BEFORE they sold? So why wait and not enjoy the updated place you live? Home Equity can help you do that.
Be My Neighbor can connect you with the best professionals to give advice on which projects to invest in to get the greatest return on your investment when you sell.
>>3. Pursue Your Personal Goals
In addition to making a move or updating your house, home equity can also help you achieve the life goals you’ve dreamed of. While you shouldn’t use your equity for unnecessary spending, leveraging it to start a business or putting it toward education costs can help you achieve other lifelong goals. Moreover there is a strong movement toward investing your Home Equity into cash value life insurance products. While Be My Neighbor is not a licensed investment firm, we do have some strong professionals that we highly encourage you to talk to if you’re interested in continuing to build wealth into the future.
Your home equity can be a game changer. If you’re unsure how much equity you have in your home, connect with us so we can help advise you on your next move Hello@bmn.mortgage.