One of the many benefits of owning a home is building equity. When home prices are rising, your home becomes an automatic savings account. If you’ve owned your home for a few years, you likely have significant equity—even if your home is distressed. Equity grows over time as you pay down your loan while your home value grows. Since home prices have gone up so much in the last few years, many people are sitting on record amounts of equity. According to CoreLogic’s latest data, the average U.S. homeowner now has about $290,000 in equity.
If you’re in a similar situation and you’re wondering how to make your equity work for you, here are three main options you might want to consider:
1: Follow your dreams.
Have you always dreamed about starting a business? Putting your child through college or grad school? Buying an investment property? You can use your equity to fund whatever’s important to you through a home equity line of credit. This, of course, does need to be paid back, so it’s best to stick to uses that are a positive investment in some way.
2: Improve your current home.
Has your family grown, making your current home feel too small? Consider an addition. Have you really gotten into cooking the last few years? Maybe a kitchen upgrade is a good move. Do you have failing appliances, or a roof that’s leaking or about to? Replace these before they become a real problem. Your home equity can be used to help fund any of these improvements.
One quick caveat: When considering this, make sure to look at the long-term ROI of potential upgrades. Some upgrades will come back to you with a higher home value in an eventual sale, while others may not. If your home is distressed and needs a lot of repairs, this may not be the best use of your home equity; selling may be a better option.
3: Buy your dream home.
If your current home no longer fits your life or just needs too many repairs, it might be time to look for your next home. Using your equity to put a large downpayment on a new home can be a great way to avoid PMI and lessen the impact of high interest rates. If you’re downsizing, this is especially true.
If you’re looking to sell your current home to buy a new one, you should know that at MarketPro, we buy houses in any condition. No matter what repairs your home needs, we’ll give you cash to get into your new home. We buy houses on your schedule, so you can time the sale of your current home around your new purchase. We strive to make every sale simple and smooth; just hear what our customers have to say!
Work with MarketPro:
We’ll give you a fast cash offer for your current home just as it is now; we buy houses with no repairs, no upgrades, no inspection, no commissions or fees. You can even choose your exact closing date. Our team will walk you through your quote, including a review of what your home would likely bring on the open market.
If you’re in Washington, D.C., Maryland, Virginia, Pennsylvania or Florida, we’d love to show you how easy and stress-free the sales process can be. Contact us today for a same-day, no-pressure quote.