Be Smart. Start building equity if you haven’t already. Every real estate investor or homeowner wants to see their equity increase. Equity is the value your home has after subtracting your loan balance.
💰 Adding Value To Your Property
You only end up building equity if your home’s value is more than what you owe.
For example, if your home is worth $750,000 and you owe $100,000 on your mortgage, your home equity is $750,000 -$100,000 which is $650,000. Equity building makes real estate a smart and exciting investment.
With home equity, you can pay any related cost after selling your home.
Home equity also increases your chances of getting an equity loan.
Building equity in real estate is easy, you simply need to add value to your property and reduce the amount of home debt.
Knowing how to move the needle on the equity chart is important. Do that right and you can push values up.
Equity increases with an increase in home value.
Most homeowners unconsciously increase their home value through regular maintenance, repairs, and renovation.
This ends up increasing your home equity, allowing you to take in all its benefits.
Most real estate investors know how to get equity in their home through remodeling and making timely purchases.Is gaining equity in your home a lost art? Click To Tweet
💵 Increasing Home Prices
Rising home prices naturally increase your home value over time.
This is very evident especially for houses in attractive neighborhoods like the 85016 zip code in Phoenix AZ or other highly sought after communities within your city.
With increasing house prices, you don’t need to be on the inside track to know how to get equity in your home.
A great place to start is with our online Home Value Calculator. Takes a whopping 15 seconds.
🏘 Home Remodeling to Increase Building Equity
Home remodeling increases the value of your home.
Remodeling projects that work better than the rest include; Kitchen, bathrooms, sitting rooms, and a bedroom.
Although these remodeling projects are often expensive, they end up increasing your home equity. It is, however, important to know where to spend those remodeling dollars.
Here in Phoenix the Arcadia Lite neighborhood is a fan favorite for remodeling and additions. While many of the original homes are 1500 – 1800 square feet, the lots are generous and allow for added rooms without cramping the yards.
The Arizona Biltmore is also seeing many of the homes getting updated. On top of that, there is a ton of infill building going on in the city. Everywhere you look it seems like there’s a dumpster and construction crews doing their thing.
🛠 Regular Maintenance
Regardless of whether your house is newly constructed or not, it requires regular maintenance.
Most homeowners usually neglect or fail to do regular maintenance simply because it’s boring or they are reluctant.
This gradually results in a decrease in home equity as the house gradually depreciate over time.
Repairs like deteriorating roof resulting from leaks rapidly reduce your home value.
💷 Reduce The Debt On Your Home – Regular Monthly Payments
Go in for short-term loans:
If your prime interest is building equity, then a 15 years mortgage would be preferable to a 30 years mortgage.
The interest rates of short-term loans are lower since you have to do payments for fewer numbers of years.
As you spend less over a short period of time, you also build equity faster.
As a homeowner who is eager to know how to get equity for your home, you need to seek help from experts.
If you plan on holding your property longterm than you may want to jump on low rates.
Refinancing only makes sense if the ROI comes within a few years. Be mindful of your future plans and ask your loan officer to calculate the number of months it will take to recapture your investment for refinancing your home. This way you can take advantage of dipping interest rates without regretting the decision later.;
💸 Make Extra Payments
Extra payments can be done to reduce the time period for paying your monthly interest for the 30 years mortgage.
Each extra dollar reduces your debt and increases your equity.
Nothing stops you from paying extra or reducing the number of years of payments.
You can also go back to the 15-year schedule even if you initially started with a 30-year payment plan.
Your mortgage broker can help you know how to get the equity in your home.
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