As recent headlines tell us, homeowner equity (the difference between your property’s current market value and how much you still owe on your mortgage) has increased over the past few years. The average homeowner’s equity increased by $17,000 in just the last year, according to CoreLogic. ATTOM Data Solutions’ latest report on U.S. home equity found that 30.2% of 59 million mortgaged homes were at least 50% equity. Moreover, 38% of homes are free and clear, which means they don’t have a mortgage.
How can equity help a household?
You can drastically improve your life by utilizing the equity in your Albuquerque home. You can use it as a savings account when you need money. It is largely the same process as using any other savings account. The following are three reasons you should use your equity.
Financial Hardship
Equity can help you in difficult economic times. By refinancing your home for cash, you can reduce the burden and protect yourself from the prospect of the bank reshaping your debt until you recover.
Approximately 2.7 million Americans are in forbearance because of this epidemic. At least 90% of those in the program have equity of at least 10%. In most cases, the equity in the home will serve as collateral in the new mortgage loan, so they can avoid foreclosure. Regardless of whether you get a modification, your equity in the house gives you the option to sell the house and keep your equity instead of losing it or your investment.
Starting a New Business
There are many stories on how great companies such as Visual Arts, Walt Disney, Hewlett Packard, Apple and Yankee Candle started in a garage. We might not know, however, that the house (and the garage) were used for refinancing by many of these firms.
Your home equity may allow you to realize your dream of launching a new company if you’re passionate about it.
Investing in Your Children’s Future
In the United States, many families contribute to their children’s college expenses. Some have borrowed against their home equity to do this.
It’s safe to assume a percentage of that down payment money likely came from home equity.
Savings of any kind is always good. Mortgage payments can force you to save, allowing you to build wealth through home equity, which may come in handy in good and challenging times.
Contact us today to help you buy or sell your next home in Albuquerque. Looking for the perfect home for sale in Albuquerque? Our easy-to-use home search tool can help you start the process. Join us twice a week on our blog for more real estate advice and great reasons to buy a home in Albuquerque and the surrounding area. Follow us on Facebook for the latest Albuquerque real estate updates.
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