In the past few years, due to the pace of the real estate market, people had to settle for a home that they liked but may not have loved. Your current home may not be meeting you or your family’s needs but you aren’t sure what to do. The options are as such; refinance or move. If you bought or refinanced during the pandemic, you’ve probably noticed that the current mortgage rates are higher than the past. This could make you pause and seriously consider if you want to sell your home and make a move.
What if there was a way to potentially offset the higher borrowing costs? There is. The money you need for a larger down payment, you could already have in your current home in the form of equity.
What is Equity?
Equity is the difference between how much your home is worth and what you still owe on your mortgage.
Over time, as you pay down your loan, your home value/home prices are likely increasing. In recent years, we have seen rapid home price appreciation. So you may have more equity than you realize.
Keeping Current Matters writes, “The latest from the Census and ATTOm shows more than two out of three homeowners have either completely paid off their mortgages or have at least 50% equity.”
How Your Equity Can Help Fuel Your Move?
Now that you understand equity, you may be wondering what that means or how it’s beneficial for you.
When selling your home, the equity you have can help you move without worrying as much about today’s mortgage rates.
Here are a few examples of ways you can use equity to buy your next home:
Be an all-cash buyer: Depending on how long you have lived in your current home, you may have enough equity in your home that when selling, you won’t have to take out a loan. If that is the case, then today’s mortgage rates won’t affect your next home purchase.
Make a larger down payment: When you’re able to put down more money toward your down payment (possibly all of the equity from your house sale), the less you’ll have to borrow at today’s rates.
How Do You Find Out Your Home’s Value?
If you’re feeling motivated to make a move, you may be wondering how much equity you have in your home. To determine your equity, you need two things:
The current mortgage balance on your home
The current value of your home
You can do the first step, you can find out your mortgage balance on your monthly mortgage statement.
The second step, you’ll need help with. You can contact our team and we will be able to provide you a professional home valuation and commemorative market at no charge
Once you connect with us, you’ll be one step closer to using equity to fuel your next move! Let’s schedule an appointment today!
