There have been a lot of headlines reporting on how homeowner equity (the difference between the current market value of your home and the amount you owe on your mortgage) has skyrocketed over the past few years.
How can equity help a household?
Having equity in your home can dramatically impact your life. Equity is like a savings account you can tap into when you need cash. Like any other savings, you should be sensible in how you use it, though. Here are three good reasons to consider using your equity.
1. You’re experiencing financial hardship (job loss, medical expenses, etc.)
Equity gives you options during difficult financial times. With equity, you could refinance your house to get cash which may ease the burden.
2. You need money to start a new business
We’ve all heard the stories about how many great American companies started in the founder’s garage. What we might not realize, however, is the garage (along with the rest of the home) supplied the start-up money for many of these companies in the form of a refinance.
3. You want to invest in a loved one’s future
It’s been a long-standing tradition in this country for many households to help pay college expenses for their children. Some have tapped into the equity in their homes to do that.
Additionally, George Ratiu, Senior Economist for realtor.com, notes:
“52% of Americans who bought their first home in 2020 said they got help with their down payment from friends or family. The number one lender? Their parents.”
It’s safe to assume a percentage of that down payment money likely came from home equity.
Last Word
Equity provides options. Savings in any form is a good thing. The forced savings you can earn from making a mortgage payment enables you to build wealth through home equity. That equity can come in handy in both good and more challenging times.
Contact me today – working together we’ll Make Smart Moves Simple!
LISA MOLINARI, Sales Specialist, Weichert Realtors
20 Madison Avenue
Morristown, NJ 07960
(C) 908.337.1748
MolinariRealtor(at)gmail(dotted)com
lisamolinari.com
