5 Smart Tips to Build Home Equity
Having a home gives you so much in terms of shelter, memories, and safety, while also serving as a savings account. Home equity is the difference between the market value of your house and how much you owe on your home. Once you make a payment then your equity rises. Now, what are some brilliant ways to build your home’s equity?
1) Convert Those Gift Cards
During birthdays, holidays, and random events we can get an influx of gift cards that we aren’t going to use for years or we will lose them. Quickly take action in turning those gift cards into money that you can invest into your home’s equity. It can really make the difference in the long run and build your home’s equity substantially before you know it.
2) Increase Your Mortgage Payment
Do this when you’re absolutely ready to invest more into your home. Increasing your mortgage can quickly raise your equity and it doesn’t take much. If your mortgage is $900 and you increase it by $75 every month then by the end of the year that’s an extra payment. Change your payments to bi-weekly to double the speed you build equity.
Any major renovations or remodeling can significantly increase the equity on your home. When you do this not only do you have the benefit of a beautiful newly renovated room but also added value onto your home. It doesn’t have to be huge either, it can be the smaller projects that add the most value.
Be sure that when you go the renovation route that you choose options that really add value to your home. Check around for prices other people are charging for the work you want to be done. You don’t want to end up in a situation where you paid $2k and only got a $500 increase on the value of your home.
4) 15-Year Mortgage
It may be uncomfortable but it lowers your interest rate which increases your equity gain on the home. Its forced savings and by the end you’ll have a gigantic amount saved and a home that’s valuable and all yours. It’s never too late If you’re in a 30-year mortgage consider refinancing into a 15-year mortgage.
5) Start Off Right
Make a downpayment that will take out a significant chunk of monthly payments. Put down around 20% take to make a dramatic change to those mortgage payments and cut down what you owe on your home by years.
It’s not going to be comfortable doing some of these ideas, they may be out of your box, but regardless if you go for it or not you may learn a lot about how you save. Each home decision should be made with a lot of thought and not based on your impulses. If you have someone to consult, then consult with them. However, It’s going to take you making a risk to have a major payoff.