Faster and smarter
Owning a home is an investment that can garner a substantial return on investment when you sell your home. But, owning a home can also enable ou to finance some of life’s unexpected (or expected) expenses - such as a new car, kids’ university education, or reducing high-interest debts with a consolidated loan.
Homeowners in need of extra financing can use the equity in their homes as security to obtain a loan, which is usually low-interest. Home equity is the difference between your home’s market value and what is owed on it.
Your first step could start when you buy your home. The bigger the down payment you make the larger the equity you start off with.
You can also pay off your mortgage faster by choosing a shorter mortgage term that offers lower interest rates. In addition, you can make extra payments or opt for bi-weekly payments instead of monthly, which will add one extra monthly payment to your mortgage every year. Some home-owners rent part of their home so that tenants help “pay” towards the mortgage while the property appreciates.
To ensure your home appreciates in value, buy in a desired or improving area and maintain your home in good functioning and aesthetically pleasing condition. Consider home improve-ments that increase the home’s value the most, such as bathroom and kitchen renovations and outdoor landscaping which makes the front and back yards neat and welcoming.
Often, it’s just staying in a home for many years that builds up equity.
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Money matters: build equity in your home
Blog by Doriana Zohil, Broker of Record/Owner | November 10th, 2019