Leveraging Your Home Equity When It’s Time to Sell

One of the benefits of homeownership is that, over time, you build equity. When the time comes to sell your home, you can use the equity you have gained over the years towards the purchase of a new home.

To better understand how you can use equity when the time comes, let's start with what equity is. Bankrate defines home equity as “the portion of your home you’ve paid off – in other words, your stake in the property as opposed to the lender’s. In practical terms, home equity is the appraised value of your home minus any outstanding mortgage and loan balances.” It is fair to say that if you have owned your home for some time, you have likely built up your equity – and it may be more than you think.

Data from the U.S. Census Bureau and ATTOM have found that the majority of Americans have a considerable amount of home equity right now. Their data shows that 68.1% of Americans have paid off their mortgage or have at least 50% equity. Having a significant amount of home equity is beneficial to homeowners in more than one way. Large amounts of home equity provide financial security for families and minimize the chances of a housing market crash. 

As your own equity grows over time, that equity offers financial stability while you own your current home. Then, when you are ready to sell your home, you can use those financial resources – from the home equity you have built – to help purchase your next new home.

As always, it is important that you work with a trusted real estate agent to help you find out how much equity you have and how much that could help in your next home purchase. Here at DwellHop, keeping current matters.  Feel free to contact us to see how to leverage your equity today!