Equity — or the share of your property you actually own — is a benefit to any homeowner. For one, it means more profits when it’s time to sell. On top of that, it can also give you cash when you need it — either through a refinance or home equity loan.
If you want to build your equity even further, there are several ways to do it, including:
- Buying in an up-and-coming market. If home values in your neighborhood start to rise, so will your property value. That can mean more equity, too.
- Increasing your down payment. The more you put down, the less your lender will need to loan you, and the larger your equity stake will be.
- Paying more on your mortgage. Putting extra toward your mortgage loan — either each month or a few times a year — can help you pay down your balance and increase your share. Consider putting your annual tax refund toward your loan to really make a dent.
- Renovating your home. Anything that improves your home’s value also increases your equity. Choose your projects wisely, and reach out if you need some help getting started.
- Refinancing your loan. With a short-term loan, like a 15-year, you can pay down your balance faster (and sometimes get a lower rate as well). This can help you build equity more quickly.