It’s time to check on your equity!

It’s time to check on your equity if you are a homeowner. You don’t even have to have owned your home for very long. I am writing this blog because I noticed a home sold very close to where a client of mine bought 2 years ago. I called her up and told her about her increased value and she said she was interested in moving out of state. I figure after that, I am going to call all of my clients this week and let them know how much their home is worth today. Many folks will be pleasantly surprised. Across the country values have jumped up 10% or more year over year since the Pandemic began leaving many fat with equity. 

It’s great having equity, you have increased profit once you sell your home, but you have an appreciating asset that allows you to leverage equity also. 

Three common ways to leverage equity in your home are with:

A home equity loan, which is disbursed to you in a lump sum. The loan is repaid in monthly installments over a set term of five to 30 years (similar to your mortgage) — and typically has a fixed interest rate.

A home equity line of credit (HELOC), which is a revolving line of credit that works like a credit card. You only pay back what you spend, plus interest, and your credit line can be reused as long as you have access to it. HELOCs usually come with variable interest rates, but fixed-rate HELOCs are an option.

A cash-out refinance, which is a type of refi that allows you to replace your existing mortgage with a home loan for more than what you owe. You take the difference between the two loans in cash.

American homeowners were sitting on a record $9.9 trillion in so-called "tappable equity" at the end of 2021 following a boom in housing prices last year, according to data firm Black Knight. 

Arguably there are only a few good reasons to take money from your primary residence; home improvements, debt consolidation or buying a second residence. It is not advised to take money from your home for anything risky. You also should steer clear of borrowing too much money against your home and if  you are unsure of how much money you need or how best to use your equity get in touch with me so we can discuss your options. I can check your value against your mortgage payoff and help you figure out if that’s a good move for you.