Unlock the Potential of Your Home Equity When Selling

Are you contemplating putting your house on the market? Amidst the ongoing affordability concerns in the housing market, understanding your home equity could provide clarity and ease to your decision-making process. According to an article by Bankrate:

"Home equity refers to the disparity between your home's current value and the outstanding balance on your mortgage. Essentially, it represents the portion of your home that you own outright."

Conceptually, equity is a straightforward calculation: it's your home's present value minus your outstanding mortgage balance. Surprisingly, your equity may have experienced more growth than anticipated in recent times.

With the significant surge in home prices over the past few years, the value of your home—and consequently, your equity—has likely witnessed a substantial uptick. Consequently, you may find yourself sitting on a larger equity cushion than you initially thought.

Maximizing Your Home Equity: A Strategic Move

For homeowners contemplating a move, the equity nestled within your property could serve as a valuable asset. According to CoreLogic:

"The average homeowner in the U.S. with an existing mortgage possesses over $300,000 in equity."

Clearly, homeowners presently enjoy a substantial equity advantage. Additionally, recent data from the Census and ATTOM reveals that more than two-thirds of homeowners have either paid off their mortgages entirely or possess at least 50% equity.

This translates to roughly 70% of homeowners currently boasting a considerable equity stake in their properties.

Post-sale, you can leverage your equity to facilitate the purchase of your next home. Here's how:

Become an All-Cash Buyer: For those who have resided in their current home for an extended period, accumulated equity may enable you to purchase your next home outright, without the need for a mortgage. This not only eliminates the burden of borrowing but also positions you as a competitive buyer in a tight housing market.

Increase Your Down Payment: Alternatively, your equity can be utilized to bolster your down payment for your next home purchase. In some cases, it may even enable you to make a larger down payment, thereby reducing your borrowing requirement and potentially securing more favorable mortgage terms.

Determining Your Equity: The Simplified Approach

To ascertain the extent of equity tied up in your property, consider reaching out to a trusted real estate agent for a Professional Equity Assessment Report (PEAR).

In Conclusion

If a move is on the horizon, don't overlook the power of your home equity. Connect with a local real estate agent to uncover the magnitude of your equity and explore how it can be harnessed to facilitate your next home endeavor.