Wealthy and Wise: 4 Ways to Build Your Home Equity
Monday, March 25, 2019, 6:00 PM | Leave Comment
Building equity in your current home can help increase its value, which may get you a bigger return if you ever decide to sell.
You may be pleasantly surprised to learn that there are several simple ways to increase your home’s equity.
Following these four suggestions can help you raise your equity in almost no time.
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Make Bigger Mortgage Payments
By paying more than the minimum amount that’s required each month, you can quickly build equity in your home. NerdWallet.com suggests rounding up the minimum amount to the nearest $100 or so to increase your payment. You can also switch to paying every two weeks instead of monthly so that you’ll make an additional payment each year. Another idea is to try scheduling automatic payments from your bank account sporadically throughout the year so that you can continue paying more than what’s required.
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Don’t Refinance
You may be tempted to refinance your home to get some additional cash flow or for a lower interest rate on your mortgage, but doing so could be detrimental to your equity. You should keep as much money in your home as possible so that the equity can continue growing. Withdrawing cash from your equity line will mean that you’ll end up owning even less of your home until the full amount is paid back. If you do need to refinance, make sure that you only do it a limited number of times so that your entire equity won’t be depleted.
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Cover Living Costs with One Salary
If you live with a partner and either one of you makes a good enough salary to support both of you, consider using only one salary to cover the costs of living. By devoting the other person’s salary entirely to house payments while the two of you live off of a single salary, you’ll be able to pay down what you owe on your home much quicker and see your equity skyrocket. If the single salary that you’re living off of still leaves you with money to spare, you can dedicate even more of your funds to mortgage payments.
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Perform Renovations
Maintaining the upkeep of your property can increase its value. Any repairs that need to be made to doors, windows, or siding should be done either by you or professional contractors. New paint on the outside of your home as well as your walls and ceilings inside your home can also raise your equity. Getting a new garage door from Plano Overhead Garage Door or another contracting service in your area is another option that you should consider. Replacing old appliances and countertops inside your home can further increase your equity.
Building equity often takes time, but you can hasten the process by making a few smart adjustments to your lifestyle. With more equity, you’ll be more empowered if the time ever comes to put your house on the market.
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