Building Equity
Date Published
Building equity in your home is one of the smartest financial moves you can make as a homeowner. Equity represents the portion of your property that you truly own, and increasing it can provide greater financial security, borrowing power, and profit when you sell. Here are the Top 10 ways to focus on building equity quickly and efficiently.
1. Make a Large Down Payment
A bigger down payment at purchase means you start with more equity and lower monthly payments, accelerating your progress in building equity.
2. Choose a Shorter Loan Term
Opting for a 15-year mortgage instead of a 30-year one helps you pay off your principal faster, which is a powerful strategy.
3. Make Extra Mortgage Payments
Even small additional payments each month can significantly reduce your loan balance over time.
4. Drop Private Mortgage Insurance (PMI)
Once you reach 20% equity, request to remove PMI. This lowers your monthly expenses and allows you to direct more funds toward building equity.
5. Boost Your Home’s Value
Renovations and upgrades with high ROI—such as kitchen remodels or energy-efficient improvements—can increase your home’s market value and your equity.
6. Maintain Great Curb Appeal
Regular landscaping, exterior cleaning, and small repairs can improve your home’s value, making building equity easier when it’s time to sell or refinance.
7. Rent Out Extra Space
Renting out a spare room or finished basement generates extra income, which you can use to pay down your mortgage.
8. Limit Borrowing Against Equity
Avoid unnecessary home equity loans or lines of credit. The less you borrow against your home, the more progress you make in building equity.
9. Stay Put and Let Your Home Appreciate
The longer you own your home, the more likely it is to increase in value, especially in a strong market.
10. Check Your Property Tax Assessment
Ensure your home isn’t over-assessed. If it is, challenge it to lower your property taxes and keep more equity in your pocket.
Conclusion
Whether you’re a new homeowner or looking to maximize your investment, focusing on building equity is key to long-term financial health. The Onward Real Estate Team is dedicated to helping you navigate every step of the process, offering expert advice to ensure you make the most of your homeownership journey.
References
LendingTree – How To Build Equity in Your Home in 10 Steps
RealEstate4Investing – Ten Proven Ways to Build Equity in Your Home
HomeLight – 10 Ways for Building Equity and Boosting Home Value