Your home is likely one of the biggest purchases you’ll make. It’s your home and your investment. Maximizing the ownership in your property should be a priority. Home Equity is the current value of your home minus the amount you owe. The larger the equity in the home the better.
“Your home equity can be used for everything from future remodels and improvements to retirement, so the more you have of it, the better.”
1. Make a larger down payment. The average down payment on a home is 20 percent. If you can afford the extra money, you should consider putting more down up front. Doing this will also lower your monthly payments.
2. Purchase a lower priced home. Higher priced homes will yield more equity in the long term. Lower priced homes allow you to make a larger down payment and possibly shorten the length of the loan.
3. Make paying off your mortgage a priority. Pay as much towards the principal as you can. This way you’ll be paying toward your own net worth.
4. Round up monthly. A little extra money each month can really help shorten your loan time.
5. Choose a shorter loan term. If you can afford to have larger monthly payments this is the way to go.
6. Funnel extra money. Put gifts, bonuses and tax refunds towards your mortgage.
7. Make an extra payment each quarter. If you can, save money every month towards a quarterly extra payment. This can shave years off of your loan.
“There’s a lot to be gained from making a concerted effort to build equity in your home faster. Putting in more money now might seem difficult to imagine, but it’s almost certainly going to be worth it in terms of your future financial health.”
The main goal to build equity more quickly is to chip away at your margate principal as fast as possible. Making larger payments or putting more money down upon purchase are just two ways of making this happen. Working with a financial advisor or a trusted real estate attorney can help you come up with a strategy to quickly build your home’s equity.
Source: Moving | Read the full article here.
Stachel Law’s real estate clients include lenders, brokers, investors, consumers, sellers, and real estate agents, all of whom are counseled and represented throughout every step of a legal matter. The firm provides clients with extensive experience in complex real estate transactions and litigation.