Oro Valley Real Estate - Build Equity Fast
Equity is the market value of your home, minus your outstanding mortgage debt. So, for example, if you can sell your home for $450,000 and you still owe $100,000, you have $350,000 in equity. Building equity is one the biggest financial benefits of ownership.
If you live in a market where home values are rising, yours may float up with the rising tide and your equity will increase without doing a thing.
Or you can work on growing your home’s value by decreasing the amount you owe and/or increasing the value of your property. Here are some ways to do both.
If you pay down the principal faster, your equity should increase faster. This can be done a few different ways.
Paying more: If you have a 30-year mortgage, adding more to your payment can help you gain equity. Make sure your lender applies it to your principal.
Paying faster: Bi-weekly payments. So instead of 12 payments a year, you make the equivalent of 13, paying down your mortgage faster and gaining more equity.
Making smart improvements and adding the right amenities to your home can also increase its market value, which means more equity for you.
There are home improvements buyers typically love: bathrooms, kitchen updates, fixtures and flooring.
Be mindful of the market as you’re thinking about how much to invest.
The realities of a buyers or sellers market will have an impact on how much return you’ll get when you sell.