Home Equity: What it is and Why You Should Consider Selling Your Home Now
There is all this talk about how RIGHT NOW is the time to sell – it’s a ‘seller’s market’ is something you probably hear left and right. Here’s why…
South Florida is experiencing increases in property value based on increased market demand and limited supply. Interest rates are historically low and we have a strong economy, and with Florida as a desirable location to live, more buyers are entering the market. Thus, demand for homes is outpacing inventory.
Before we really dive in on this topic, let’s first define ‘equity.’
Equity is the difference between what you owe on your mortgage and what your home is currently worth. If you owe $500,000 on your mortgage loan and your home is worth $750,000, you have $250,000 of equity in your home. (Source: Quicken Loans).
Homeownership has provided families with a place that is their own and an avenue for building wealth over time. This wealth is built, in large part through the creation of equity. Building equity through your monthly principal payments and appreciation is a critical part of homeownership that can help you create long-term, financial stability.
Plain and simple: home equity, for most Americans, is the quickest way to build household wealth.
Your home equity is part of your total wealth as a homeowner. The two most common ways homeowners can leverage their wealth are through selling or refinancing.
Typically speaking, if you love where you live and it fills all the buckets of what you want in a home, refinancing by taking equity out of the house to buy an investment property might be the right move for you. Alternatively, if there are home improvements you’d like to do that could help you improve your home value, this could be a viable option as well.
On the flip side, if you’ve outgrown your current home or you’re ready for a new one, (whether it’s where you live or the home itself). Interest rates are so crazy low that you could take advantage of the market and get more of what you like in a home and home location.
Let’s say you bought a home when your family was just beginning; now your family is growing and you’re in a place to take that equity and purchase a bigger home – you could potentially afford a more suitable home in a location with better schools or closer to work because you’ll have more cash to put down.
Alternatively, you can buy new construction, or a fixer-upper, a duplex, or rental property, and build new appreciation. Long story short: real estate investment creates long-term wealth.
Whether you’re ready to buy or sell a home in 2021, if you’re planning to take advantage of the market this year, let’s connect to talk about the opportunities available in our local market.