By simple definition, home equity is the current market value of the property subtracted by any liens that you have on your home or property. Some call it the real property value. For example, if your home is worth $300,000 and the mortgage balance is $85,000, your home equity is simply subtracting the mortgage balance from the home’s worth. That is $300,000 subtracting $85,000 and your home equity is $215,000. It is an advantage to have higher equity since you are in a position to borrow more money.
Why Should You Build Your Home Equity?
There are several reasons for building your home equity; it is a reliable method you can use to grow wealth. Increasing your home equity also acts as a security for you to maintain your home when there. Higher home equity also protects you while borrowing loans for any other purpose you intend because lenders will check on your home equity to guarantee access to a loan.
You might need some earnings from your stock investments to make improvements to your home. Some sites provide investors with basic investment information to help them make better financial decisions. If you own IPOE stock, you can go to marketbeat.com and see how the stock is doing today. This helps in knowing what to do with your investments and if the investments can help with home equity.
Having high home equity is also an opportunity for you to make a profit; this will result from you selling your home at a higher cost than what you owe the lender. Since home equity acts as financial security for you, there are several ways to build your home equity. You can invest in home improvement and remodeling activities. Undertaking activities to upgrade your home, such as kitchen remodeling, will help your property value increase. You can achieve this by employing a remodel plan in mind or contacting a professional. These contributions to the home are worth more than what you owe and are an investment.
Investing in Technology
Technology impacts people’s lives, especially in modern society. It plays a significant role in aiding us to perform our daily duties. It also helps in maintaining security through technology surveillance. It offers flexibility through gadgets connected to the internet that brings about convenience. Several ways investing in technology can help raise your home equity include:
For security, investing in digital surveillance and control systems reduces instances of intrusion and robbery. Modern technology provides you with security cameras that ensure your home is under surveillance all through. It helps to ward off potential intruders by alarm systems. Other advanced security procedures such as automatic locks and voice and face recognition guarantee security by you as you have extensive control over your home
Investing in an intelligent lighting system is also another way to raise your home equity. These intelligent lighting systems are environment-friendly and do not lead to higher power bills. They may be solar-powered, saving on energy bills, while they grant you, the homeowner, control over your household’s lighting. They are automatically controlled with triggers such as motion sensors and heat signatures. It is therefore easy to control your house lighting remotely, bringing about convenience.
An automated ventilation system to regulate the air indoors is a smart idea. Technology in the ventilation system can help to activate and deactivate ventilation fans. Various functions such as temperature and humidity can be achieved by automation. Automating of this sector plays a significant role in the much sought-after comfort in a home.
Since your home is your financial security, it is best if you protect its value. You can achieve this by contacting the family insurance agent. With the insurance agent, you will learn the steps you need to take and ensure that the home is secured financially.
Using shorter mortgage payment terms such as bi-weekly and refinancing will hand you the benefit of lower rates on the interests and allow for more of your mortgage to be allocated to your monthly principal. Therefore, the money paid to your mortgage’s principal is converted to your equity. Thus, having more of this raises your home equity. Alternatively, having other sources of income will help you pay off your mortgage quickly, providing you with more home equity.
Making a significant down payment is also another method that homeowners apply to help build their home equity. The bigger the down payment you put, as explained by the New York Times, the home equity of your home directly rises. For example, if a home costs around $200,000 and you put $50,000 as your down payment, you will owe $150,000, and your equity will be $50,000. But on the other hand, if you put a down payment of $100 000 for the same house worth $100,000, you will owe another $100 000. The home equity of $100,000 is far much better compared to $50,000.
partnered post • cc-licensed image by Mel Johnson