Thinking of making a move? Affordability is a primary concern for many, but your home equity might hold the key to unlocking your next chapter. At Krista Hopkins Homes, our team of Tri-Cities realtors understands the local market inside and out, and we’re passionate about leveraging your equity to achieve your real estate goals.
We’ve crafted this blog post to empower you with insights and strategies based on our experience and industry data. Let’s dive into the world of home equity and explore how it can fuel your move!
Your home equity might just be the key to simplifying your decision-making process. An insightful article from Bankrate breaks it down:
“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.”
In essence, equity is a straightforward mathematical equation – your home’s current value minus your outstanding mortgage. Surprisingly, your equity may have grown more than anticipated in recent times.
With a surge in home prices over the past few years, the value of your home – and consequently, your equity – has likely experienced a significant uptick. The question is, how can you leverage this newfound equity to your advantage?
For those considering a move, the equity in your current home can be a substantial asset. According to CoreLogic:
“. . . the average U.S. homeowner with a mortgage still has more than $300,000 in equity . . .”
Undoubtedly, homeowners currently possess substantial equity. Data from the Census and ATTOM indicates that over two-thirds of homeowners have either completely paid off their mortgages (depicted in blue in the chart below) or have at least 50% equity (depicted in black in the chart below):
This implies that approximately 70% of homeowners are sitting on a considerable amount of equity.
Post-sale, you can utilize your equity to facilitate the purchase of your next home. Here are a couple of ways to do it:
Become an All-Cash Buyer:
If you’ve been in your current home for an extended period, you might have enough equity to purchase your next home without taking out a loan. This approach eliminates the need to borrow money or worry about fluctuating mortgage rates. As noted by Investopedia:
“You may want to pay cash for your home if you’re shopping in a competitive housing market or if you’d like to save money on mortgage interest. It could help you close a deal and beat out other buyers.”
Make a Larger Down Payment:
Your equity can also contribute to your next down payment. It might even be substantial enough to allow for a larger upfront payment, potentially resulting in more favorable interest rates. The Mortgage Reports explains:
“Borrowers who put down more money typically receive better interest rates from lenders. This is due to the fact that a larger down payment lowers the lender’s risk because the borrower has more equity in the home from the beginning.”
The effortless way to assess your equity to determine the extent of your home equity, seek a comparative market analysis from a trusted real estate agent.
Ready to explore your equity’s potential?
Making a move can be exciting, but navigating the intricacies of home equity can feel overwhelming. Whether you’re in the Tri-Cities or beyond, we’re here to help you understand your options and unlock your equity’s potential.
Our team of experienced real estate professionals can provide valuable guidance, regardless of your location. We offer informative resources and personalized consultations to empower you to make informed decisions about your next move.
Contact us today to discuss your individual circumstances and explore how your equity can fuel your real estate journey!