How To Build Equity In Your Home

Unlock your property's hidden potential and watch your investment grow. No matter how long you've owned your house, it's important to understand how to build equity. 

Why Is Building Equity Important?

Tips On How To Build Equity, Fast.

1. Make Extra Payments When Possible. One effective way to build equity quickly is by making larger or extra mortgage payments. By paying more than the minimum amount due, you reduce the principal balance faster, which in turn decreases the interest you owe over the life of the loan and builds your equity faster.
2. Make Home Improvements That Will Provide Good Returns. Another tip is to invest in home improvements that increase your property's value. Upgrades such as kitchen remodels, bathroom renovations and energy-efficient installations can significantly boost your home's market value, thereby increasing your equity. A home equity loan may be needed to accomplish this goal.
3. Keep Up With Regular Maintenance And Curb Appeal. Believe it or not, curb appeal can also impact your home's equity. Maintenance, repairs, renovations, and even landscaping projects can go a long way. And as a cherry on top, you get to enjoy the benefits!
4. Refinance A Shorter Term. Long terms sometimes seem more appealing, but in reality cost more in interest. A shorter term, though the payments may be larger, will help you whittle away your loan quicker and accrue less interest.
5. Shop Around For Lower Rates. If you can secure a lower interest rate, consider refinancing your mortgage. This can reduce your monthly payments, allowing you to allocate more funds towards paying down the principal. Because Levo is member-owned, we can often offer lower rates than some competitors since we aren’t trying to pay shareholders. Always be sure to compare what you currently pay to what other places offer to see if you can get yourself a better rate and also make sure you are factoring in fees and other closing costs associated.

How To Calculate Your Home's Equity.

Calculating your home's equity is pretty simple. Start by determining what your home is worth. You could call a pro for an appraisal or just have a look at what similar houses in your neighborhood are going for.

Next, take the marketing value of your home and subtract the amount you still owe on your mortgage. And there you have it - your home equity. For example, if your home is worth $300,000 and you owe $200,000 on your mortgage, your equity is $100,000.

For help calculating your home's equity, contact one of our home equity experts.

Leveraging Market Trends to Your Advantage.

Market trends can significantly impact your home's equity. By staying informed about the real estate market, you can make strategic decisions that enhance your property's value.

For instance, buying in an up-and-coming neighborhood can lead to significant equity gains as the area develops and property values rise. Additionally, timing your home improvements to coincide with a seller's market can maximize the return on your investment.

The Bottom Line.

Building equity is more than just paying off your mortgage—it's a key to unlocking financial freedom. Your home's equity can be your safety net, or a stepping stone to your next big adventure. So, make building and managing your home equity a priority, even if you're not planning on selling your home or dipping into that equity just yet. By understanding what equity really is and how to build it, you can make your home work harder for you. It's all about smart choices that boost your property's value. 

Want to know more? Swing by or visit Levo.org and contact one of our experts. We'll help you understand your credit score and answer any questions you have about making the most of your equity.