Put Your Equity to Good Use

Owning a home gives you so much more than a place to live. In fact, being a homeowner can help you achieve your financial goals. As you make payments and your home increases in value over the years, you build equity. And that equity can be put to good use in many different ways. Here’s a brief look at how you can tap into the potential of your home equity.

Home equity explained

First of all, let’s be clear about what home equity is. It is the difference between how much you still owe on your mortgage and your home’s current value. Let’s say you owe $100,000 on your mortgage and your home is worth $200,000. That means you have $100,000 worth of equity in your home. Your equity increases as you pay off your mortgage and as the value of your home rises.

Buy a new home

One of the most common ways for homeowners to use their home equity is to buy a new home. If you’re ready to sell and move to a new place, your home equity will help you make that happen. Your equity represents the profit you’ll make when you sell (minus closing costs and other fees). That can be a substantial amount of money that will allow you to make a large down payment on your next home. This means you may be able to buy a larger home. That’s because with a big down payment your mortgage will be smaller and your monthly payments will be, too.

Make upgrades

Are you itching to make some upgrades to your home? Then your home equity can be used for those renovations as well. You can borrow against your home equity with a home equity loan or line of credit, or a cash-out refinance. The interest rates on these kinds of loans tend to be smaller than those you’d get with a credit card or personal loan.

Use it for your retirement

For some, home equity can help you fund your retirement. If you’re 62 years old or older, then you might research getting a reverse mortgage. With this type of arrangement, you would stop making payments on your home. Instead, you would then receive money based on how much equity you have. You don’t pay this money back unless you sell or pass away. The profits from the sale of the home would then be used to pay back the loan. 

Pay for an education

Finally, your home equity can also be used to help the ones you love. Do you have a child or relative planning to go to college – or are you hoping to go back to school yourself? Then you can use your home equity to help pay for that education. It’s like investing in the future. 

Contact Agent inc. today

Are you ready to tap into the potential of your home equity? Then contact Agent inc. at 949-791-8160 or [email protected]. Let’s open your world to new possibilities!