Why would someone want to increase the equity of their home? Well, when the amount that you owe on a home is less than the value of your home, the difference is your equity. There are three ways you can increase the amount of equity your home has:
1. Allow it to sit and appreciate. This is what most people already do; they let the home appreciated on its own based on market and economic conditions. It may take longer for your equity to increase this way, but it does help.
2. Put down a bigger down payment when refinancing your home. The bigger the down payment, the less you’ll owe the banks, and, therefore, the more equity you’ll have. Doing this could allow you to use that equity to help with emergencies that occur later down the road.
3. Do home improvements. The best way of increasing the equity in your current home is probably to upgrade the kitchen—the cabinets, counters, flooring, paint, vanities, and so on. Upgrading and remodeling your home could add a lot of value to it, increasing your equity in the process.
If you found this to be useful, you’re encouraged to pass it along to friends and family. For any questions you have, feel free to reach out to us. We’d be glad to speak with you.