4 Ways Homeowners Can Use Their Equity

Moving to another home or new location

You can use your equity to buy another home whether you need to upgrade to a bigger home or to downsize into a smaller one. Likewise, you can also use your equity if you want to relocate to a different area. Whether it’s to move for work, to be nearer to family, or to fulfill a lifelong dream, your equity can definitely help you in buying a new home,

Paying personal debts

Nothing feels more freeing than being debt-free. If your current goal is to clear all your personal debts, using a portion of your home equity can help you achieve that. By paying off personal debts like credit cards or car loans, you will be able to consolidate those debts at a lower interest rate. Hence, it will help you pay your debts easier. Paying off personal debts is a good start in eventually saving and growing your wealth. If you decide to use your home equity in paying those debts, just make sure to pay them on time as you will be using your house as collateral.

Starting a new business or growing your current 3 business

Nothing feels more freeing than being debt-free. If your current goal is to clear all

your personal debts, using a portion of your home equity can help you achieve that. By paying off personal debts like credit cards or car loans, you will be able to consolidate those debts at a lower interest rate. Hence, it will help you pay your debts easier. Paying off personal debts is a good start in eventually saving and growing your wealth. If you decide to use your home equity in paying those debts, just make sure to pay them on time as you will be using your house as collateral.

Funding someone’s education

Preparing for your children’s college ege is a daunting task and can be heavy on your finances. On the other hand, going back to school yourself and pursuing higher education can also cost a lot of money. Using a portion of your growing equity can help you finance you or your loved one’s education. Your future, as well as your loved one’s future, is also an important investment!

Start Building Your Equity Today

  1. Make a bigger down payment.

    The quickest and easiest way to build your equity is to put down a bigger deposit when purchasing your home. Increasing your deposit from 5% of the property value to 10% will instantly give you a bigger equity value.

  2. Increase your monthly mortgage payment or make additional payments.

    Remember that only a portion of your monthly mortgage payment will be allotted to the principal cost of the house. Increasing your monthly mortgage payment or making additional payments that go to your principal cost will help you steadily build your home’s equity.

  3. Refinance and shorten your mortgage loan term.

    Shortening your loan term might mean higher monthly payments, but it also means that you’ll have lower interest rates and that a bigger portion of your payments will go into building your equity.

  4. Invest in remodeling or home improvement projects that can increase the value of your home.

    By taking up remodeling projects whether it’s done by a professional or approached in a DIY way, your home’s equity will increase as your home’s value increases.

  5. Just wait for the value of your home to increase in time.

    If you don’t need to urgently spend your home’s equity, you can also just wait as your home’s equity increases gradually over time.

Join The Discussion

Compare listings

Compare