Top Tips for Building Equity in a Home

When it comes to equity in our homes and properties it actually benefits us greatly regardless on whether or not we’re planning on selling. For one thing it looks amazing on paper as the more what we own is worth (and the less we owe) the more appealing we are to lenders in the event that we may wish to borrow against said equity. Also it increases our credit scores as well!

(This is a contributed post, for more information about my compensation please read my disclosure policy)

Properties are a good investment to make. What makes them profitable is the equity that you have in them. Equity is vital if you want to make a successful investment and fortunately, is something that you can build. 

When it comes to property, equity is the amount of money that you own. This can be calculated as the difference between the amount of money that you owe on the mortgage, and the value of your home. For example, if your property is worth $150,000 and you owe $100,000 on your mortgage, you will have an equity of $50,000. There are many ways that you can increase the equity in your home. 

Building equity can benefit you in many ways, for example, it will help you make a profit if you sell your home, you can borrow against the equity in your home if you want to make a big ticket purchase, and increase your net worth.  

To help you get started, here are some of the best ways you can increase your equity. 

#1 Make a big payment

You can instantly increase the equity in your home by making a big payment on your mortgage. You can do this when you are purchasing a house and put down a bigger deposit, you can save some money and pay off a chunk or you can refinance your mortgage for a shorter term. Not only will you own more equity in your home, but you will also pay less interest over time and have your mortgage paid off much quicker. 

#2 Improve your home 

Home improvements are an excellent way to build equity in your home. You will just need to invest some of your time, skills, and money in making some changes and you will quickly see the value of your home increase. Homes can sell for a lot more money if they are modern, clean, bigger, and have up-to-date features.

Some of the most high-value improvements that you can make are bathroom and kitchen remodels. You can also make your home more energy efficient, add an extension, convert your loft or garage, or even just repaint your entire home.

Regardless, you should always tackle any problems that you find in your home. For example, one of the biggest ways you can increase equity, or lose equity, is the condition of your roof. You should always make sure that the exterior of your home, especially your roof, is in good condition. A trusted roofing contractor will be able to help you and ensure your roof will increase the value of your home. 

If your home is fresh and new, you will be extremely competitive and will increase the amount of money it is worth. When it comes to selling your home, the investment you made at the beginning will come back to you and more. You will be able to sell your home for an increased price. 

#3 Sell in the right market

The housing market is constantly evolving. If you can learn how to read, follow and predict the market, you will be able to maximize this information and sell your home for a good profit. If you own a property, it is one of the only assets that will appreciate over time.

Land and properties become limited, which means they tend to increase in their value. The market will go up and down based on several factors, including the supply and demand of houses. If you sell your home at the right time, you won’t have to do any work and the equity will naturally increase. 

Building equity in your home is a great way to take advantage of your investment.

(This is a contributed post, for more information about my compensation please read my disclosure policy)