Wondering How to Use Your Home’s Equity?
Home prices have skyrocketed over the past few years around the country. If you own a home, it is likely your home equity has grown substantially. How can you put that equity to use?
1. Invest in Your Current Home
Some investments in your home might be necessary, like a new roof or fixing a broken heating system. Other investments might just make you happier and more comfortable in your home. Remodeling the bathroom or installing a pool might be just the thing that brightens your day.
If you would like to make some improvements and you think you may sell in the future, it would be a good idea to invest in a project with a great return on investment when it comes time to sell. Refinishing hardwood floors, interior paint, and remodeled kitchens are great improvements now and in the future.
2. Fund your Personal Goals
Have you always dreamed of taking your family on a vacation to Thailand (I have). Or, do you have a great idea for a new business venture? Would you like to help pay for a child’s college education? Your equity could help pay for these important goals.
3. Buy a New Home that Better Fits Your Needs
Did you try to host a holiday party this year and realize you can’t fit all your friends in your living room comfortably? Alternatively, are you tired of trying to warm up rooms you don’t use and a smaller space might make more sense? A smaller home is easier to clean, which is super important to me.
If you would like to move up to a more expensive home, you can use your equity towards your down payment.
If you are interested in moving into a less expensive house, talk to a Realtor and ask them to create an estimated seller net sheet for you. This will let you know how much money you will likely walk away with if you sell. You may be surprised to discover that your home equity could cover almost all, if not all, of your next home’s purchase price.
How Much Equity Do I Have?
Talk to a real estate professional who can help you figure out just how much equity you currently have in your home. Ask your Realtor for a CMA (Comparative Market Analysis), which is a tool used to estimate the value of your property. Once you know how much your home may be worth in the current market, subtract what you owe and the result is your equity. Now you just have to decide what you will do with it!
