The key to developing wealth is through wise investments. Savvy homeowners show financial stability by making timely payments on their mortgage; however, it doesn’t end there. In addition to increasing their property value, they also know how to build home equity. All of these factors are important when leveraging a HELOC, or accumulating assets.
When you build home equity, you secure a resource for the future, all of which you can borrow cash against later. If you’re a homeowner, ready to make the next move, make sure to view our tips below. You’ll see three ways that $1000 can boost your home’s longterm worth and secure more capital in the future.
What is home equity?
We offer a variety of home equity lines of credit with no out of pocket expense; but, what if you’re not ready to borrow? Should you still try to increase your home’s equity?
The answer is yes.
HELOCs provide homeowners flexibility since they are revolving lines of credit. Borrowers are free to request as little or as much as they need, under the terms of the agreement. Reasons for opening a HELOC range from debt consolidation to handling a financial emergency.
Home equity comes into play when considering what you can do with your home as collateral. Having the ability to borrow more may be helpful in some cases. That is why building equity is fundamental.
To calculate your home’s equity, start by subtracting the amount you owe on all loans secured by your house from its appraised value.
How can I build home equity fast?
There are three simple ways to increase your home’s equity. While you can repeat the tips below multiple times, they all start with an investment of under $1000.
1. Pay more than the minimum on your mortgage.
Many homeowners round their mortgage payments up to get ahead. For example, their mortgage is $1,218 per month; however, they pay $1,300. The increase makes an impact when continued throughout the year.
2. Put bonuses and gifts towards your mortgage.
If your job allocates annual bonuses, place the extra funds towards your mortgage. The boost of cash will not only put a jump start on your home’s equity, but it will get you that much closer to being mortgage-free later.
3. Construct a deck on your property
Increasing your home’s property value will reset the equity calculation. Making home improvements, such as building a deck, is a smart move towards adding more worth to your home.
Homeowners and their net worth
Financially equipped homeowners know they should build home equity to increase their net worth. As part of a strategic financial plan, these money moguls aim to lower their debt while increasing the number of assets they own. Home equity is one tool available to leverage monetary independence. For continued information, view the remainder of our wealth management gallery here.