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Unlock the Power of Home Equity When Selling Your Home

Unlock the Power of Home Equity When Selling Your Home

Are you hesitating to sell your house amidst the current real estate landscape? Affordability concerns might be playing on your mind, but assessing your home equity could provide the clarity you need. In a recent article by Bankrate, the concept of home equity is outlined as:

"Home equity is the difference between your home's value and the amount you still owe on your mortgage. It represents the paid-off portion of your home. You'll start off with a certain level of equity when you make your down payment to buy the home, then continue to build equity as you pay down your mortgage. You'll also build equity over time as your home's value increases."

Essentially, it's a straightforward equation - the current value of your home minus your outstanding mortgage. Surprisingly, your equity may have grown more than you realize, especially with the recent surge in home prices.

In recent years, the real estate market has witnessed a significant spike in home prices, consequently boosting the value of homes and, consequently, homeowners' equity. This implies that you might possess more equity than you initially thought.

Maximizing Your Home Equity in the Current Market

If you're contemplating a move, your home equity could be a valuable asset. According to CoreLogic, the average U.S. homeowner with a mortgage holds more than $300,000 in equity. What's even more impressive is that data from the Census and ATTOM reveals that around 70% of homeowners have either fully paid off their mortgages or possess at least 50% equity.

This substantial equity can be advantageous when transitioning to your next home. Here are a couple of ways to leverage your home equity:

  1. Become an All-Cash Buyer: If you've been in your current home for an extended period, the equity accumulated might be enough to facilitate a cash purchase for your next home. This can be particularly advantageous in competitive housing markets or if you wish to save on mortgage interest.

  2. Increase Your Down Payment: Your equity can also be applied to augment your down payment on the next home. A larger down payment not only decreases the amount you need to borrow but can also result in more favorable interest rates, as explained by The Mortgage Reports.

Easily Determine Your Home Equity

To assess the amount of equity you currently hold, consult a trusted real estate agent for a Professional Equity Assessment Report (PEAR).

In Conclusion

If a move is on your horizon, don't underestimate the power of your home equity. Connect with us to determine the extent of your equity and explore how it can be a valuable resource for your next home purchase.