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5 Ways You Can Increase Your Home’s Equity

January 18th, 2024

So, you’re a homeowner, and you’re wondering how much equity you’ve built up in your home since purchasing it. But what exactly is equity? Well, your home equity is essentially the difference between your home’s fair market value and what you owe on your outstanding mortgage. This means that your home’s equity appreciates each time you make a mortgage payment or if your property value increases. Makes sense, but then how do you increase the equity of your home? To answer this, our experts at Evergreen Home Buyers have compiled a list of 5 tips for increasing your home’s equity that you can begin to consider and implement straight away.

1. Increasing Your Down Payment
If you’re about to commit to homeownership and are still figuring out how to increase your home equity, one thing you should consider is increasing your down payment. When you increase your down payment, you’re putting more equity directly into your home, which is beneficial in the long run. Plus, putting at least a 20% down payment on your conventional loan will eliminate the private mortgage insurance (PMI) premium – saving you money on a month-to-month basis.

2. Put More Towards Your Mortgage Per Month
If you’ve already purchased your home and are looking for an easy way to increase your home equity, why not put more towards your mortgage per month so you pay it off faster? By making bigger or additional payments, you’ll be building equity by paying down the principal of your loan, and remember, even a small amount extra each month can make a considerable difference over time.

3. Consider Refinancing
Another option for building equity in your home is to consider refinancing your home to get better loan terms. When you refinance your mortgage after paying it off for a while, you can typically secure a lower interest rate and shorter-term length, which will not only help you pay it off faster but build equity more quickly.

4. Invest in Home Improvement
Besides the financial side of increasing your payments or refinancing your mortgage, you can also invest in home improvement. By upgrading your home, you can increase its value and, therefore, its equity. If you’re going to tackle just one area, we recommend starting on the kitchen since it’s an area that prospective buyers weigh heavily into their buying decision.

5. Wait for Appreciation
Although it’s tough to be patient when you want to increase your home’s equity, another thing you can do is wait for appreciation. If you’re in a market where real estate values are going up, then a great way to increase equity is simply to hold onto the property and let appreciation do its thing. The more the market appreciates, the more money there is to be made when you sell!

Final Thoughts
So, now that you fully understand what home equity is and how you can build it up, you’re well on your way to increasing the value and overall equity of your home. However, if you’re more interested in just selling your home for quick cash right away in the Jacksonville area, we may be able to help.

At Evergreen Home Buyers, we will purchase your home AS IS, making the process entirely hands-off for you with no repairs, inspections, appraisals, or contingencies necessary. Plus, we can close in as little as two weeks! So, for a completely quick and painless way to sell your home for cash faster, visit today.

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