Try out these tips to build up your home equity.
If you’ve just closed on your dream home, then you’ve gained a place to live, entry into a better neighborhood, and improved status. However, you have also acquired a unique type of savings in the form of home equity. Home equity is the difference between your home’s market value and what you owe on it. When you face a major life expense, you can access your savings with a home equity loan or line of credit. However, for this to work, there are some things you should do to actually build up your home equity. Here are some of the suggestions you should try.
1) Put down a Larger Down Payment
You can start building equity early on by putting down a larger down payment on your home when you close on it. Because your down payment automatically reduces what you owe on your home, it is instant equity. As an added bonus, putting down 20% or more of your property’s value helps you avoid expensive mortgage insurance.
2) Get a 15-Year Mortgage
By taking out a 15-year mortgage or refinancing your 30-year one to make it shorter, you can build equity faster. While securing a 15-year mortgage will mean steeper monthly payments, if you have the resources to keep up with this accelerated payment schedule, this is a great way to build equity while paying less interest on your home.
3) Make Home Improvements
While the previous two points focused on building equity by reducing the amount that you owe on your home, you can also build equity by increasing your property’s market value. This can be accomplished by undertaking certain remodelling or home improvement projects. Interestingly, it seems that smaller projects do a better job of increasing your home’s equity. So, upgrading your home’s appliances, adding home insulation, replacing your garage door, and so on can help to give your home’s value a boost.
Try out these suggestions to build up your home equity. Are you interested in buying or selling a home in the Hermosa Beach Area? If so, contact the experts at Brighton Escrow to get the top-tier escrow service you deserve. Serving the Hermosa Beach area, we are ready to make home buying and selling a breeze.