Build Home Equity with These Five Tips

Most people don’t think of their home as a savings account, and instead they see the investment they’ve made as a simple shelter or even a list of projects to complete in order to make the house feel more like a home. Even though people don’t usually think of the equity their home comes with, or how to build it, it can be a very valuable feature to focus your attention on. There are several ways to build home equity and increase the value of the savings account that you have to maintain.

One of the quickest, easiest ways to build equity in your home is to make improvements either to the house itself or the property it sits on. Keep in mind that not every project you embark on is going to build equity, and if this is your aim, it’s better to stick with practical improvements like resealing windows, replacing old doors with sturdier ones, and replacing old insulation in the walls. These improvements actually add to your home’s value and will help build equity.

Pay more than what the mortgage lender asks for each month. If you can swing the added expense, pay $100-$200 extra on your mortgage each month so that you can get it paid down quicker. If you can’t make several extra payments on your mortgage each year, you can at least make one extra payment by adding 1/12 of what you owe to each month’s payment so that the added funds will equal a whole payment at the end of the year.

If you’ve not yet bought a home, but you’d like to start building equity right away once you do, provide a larger down payment than what’s required. If you’re putting more than 20% down on a house, you’re going to start building equity right away. Not to mention, you’re going to save yourself money by not having to worry about private mortgage insurance.

If you and your partner are buying the home together, and you both have an income, it might be reasonable to focus one party’s income toward the mortgage while the other partner covers other bills. This move isn’t for everyone, as it requires some tightening of funds, but if it’s workable, the benefit is great.

There are several ways to build home equity, and the benefits can be extremely helpful for your financial future. This article has more tips on home equity to check out.

When the time is right to buy and sell your home, we’re here to help you with all your real estate needs! Call me, Laura Austin, at (281) 789-2911, or (936) 321-2977 or email me at Laura@RealtyTx.net. You can also visit me at my website for available listings and additional information.