Build More Home Equity
Equity - or the share of your property you actually own - is a benefit to any homeowner. For one, it means more profits when it’s time to sell. On top of that, it can also give you cash when you need it - either through a refinance or home equity loan.
But, how exactly, do you build equity? Every month you increase your home equity by making your mortgage payment. Here are some other ways to help you along.
1. Buy in an Up-and-coming Market
If home values in your neigbourhood start to rise, so will your property purchase as time ticks along. That will mean more equity, too.
2. Increase 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 at the outset.
3. Make an Extra Payment
Putting extra toward your mortgage loan - either each month, or even once 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.
4. Renovate Your Home
Anything that improves your home’s value also increases your equity. Choose your projects wisely though, that are cost effective. Perhaps, a new garage door, roof update, or fresh paint.
5. Refinance Your Loan
With a short-term loan, like a 15-year amortization - you can pay down your balance faster, sometimes get a lower interest rate, and will build equity quicker. If your income has changed for the better, than reduce the 25 or 30 year loan accordingly. Just talk with your lender and ask your questions.
Any thoughts or comments? Are you planning to buy or sell property this year? We'd love to hear from you.
