How to get your residential home equity? Every real estate investor or homeowner would always strive to build equity. Equity is the value your home has after subtracting your loan balance. You only end up with a positive equity if your home’s value is more than what you owe.
🏠 How to Build Equity in Your Home?
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.
Residential home equity really makes real estate a great investment.
By all means, with home equity you can pay any related cost after selling your home.
You can as well use it for down payments of another home.
Hence, equity also increases your chances of getting an equity loan.
Building equity in real estate is easy too, you simply need to add value to your property and reduce the amount of home debt.
Generally, it’s great to know how to build a nest egg with the property you call home.
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💰 Adding Value to Your Property
For the most part equity goes up as your home rises in value. Most homeowners unconsciously increase their home value through regular maintenance, next is doing repairs, and of course renovation.
This ends up increasing your home equity, allowing you to reap all its benefits. Most real estate investors know how to get residential home equity through remodeling.
📈 Increasing Home Prices
Rising home prices naturally increase your home value over time. In fact, this is very evident especially for houses in attractive neighborhoods or rapidly growing towns.
With increasing house prices, you don’t need to be educated to know how to get residential home equity.
🔨 Home Remodeling
Home remodeling increases the value of your home. Remodeling projects that add great value to your home when you won’t forget; Kitchen, bathrooms, sitting rooms and bedroom.
Although these remodeling projects are often expensive, they end up increasing for your residential home equity. Don’t forget to carry out remodeling projects with the greatest return on investment (RIO).
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 for a decrease in home equity as the house gradually depreciate over time. Repairs like deteriorating roof resulting from leaks rapidly reduce your home value. Here’s how you can maintain your roof all year long.
📉 Reduce the Debt on Your Home
Regular monthly payments
Go in for short-term loans: Generally speaking, short-term loans enable you to build equity within a shorter time period. If your prime interest is building equity, then a 15 years mortgage would be preferable to a 30years mortgage. As has been noted the interest rates of short-term loans are lower since you have to do payments for fewer numbers of years. When 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 your residential home equity, you need to seek help from experts.
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. After all, nothing stops you from paying extra or reducing the number of years of payments. You can as well go back to the 15 years schedule even if you initially started with a 30years payment plan. Last but not the least your mortgage broker can help you know how to get your residential home equity.
Gift of Equity Conventional Loan – by Luke Skar
How to Get The Equity Out of Your Home – by Bill Gassett
Top Homeowner Regrets – How to Avoid Buyer Remorse – by Karen Highland
How Should You Pay Down Your Mortgage? – by Debbie Drummond