SOURCE: fortune.com
Are you looking to boost your home equity? We’ve got some tips for you!
- Make a larger down payment: Building home equity begins the second you make a down payment on your home. Making a larger down payment means that you’ll have more equity in your home to start, giving you a head start to paying off your mortgage more quickly.
- Make extra payments toward your mortgage: Paying more than the minimum monthly payment on your mortgage is one way to speed things up. Bigger payments will cut down on the amount of time it takes you to pay off your mortgage in full and increase the rate at which you’ll naturally build equity.
- Home improvement projects: Certain home improvement projects can boost your home’s overall value and, in turn, increase your home equity. According to Remodeling Magazine’s 2022 cost versus value report, improvements like garage door replacement, adding a deck, or adding new siding and windows to your home can all provide a significant return on your investment.
- Choose a shorter-term mortgage: Opting for a 15-year mortgage, for example, rather than a standard 30-year mortgage, means that you’ll pay off your home in half the time, build equity a lot faster, and save money on interest.
- Refinance to a shorter-term loan: If you’ve already paid off a significant portion of an existing longer-term mortgage, you can refinance it and take out a home equity loan for more than you currently owe on your home. This is known as a cash-out refinance, and it will give you extra funds to tap into for any major home renovation projects or expenses coming your way, although the same risks related to higher monthly payments and potential foreclosure apply.
From renovations to paying off your mortgage early, there are a variety of ways to increase the value of your home. Plus, who doesn’t want to be the envy of their neighborhood? 😉