As a real estate agent, you might believe I’m talking about moving to a new home. While that may be a choice, what I am focusing on today is each of our opportunities to make a .&
Building Equity In Your Home
Most everyone knows their home is the greatest investment in your portfolio, but do you realize that the value in your home can be an even greater asset to you and your family? There are many ways to add equity to your home that doesn’t cost much, but enhances the value of your home even faster. This allows you to have more options and greater leverage when making decisions of a financial nature.
Let us look at six ways to build equity at a faster rate.
1. Make the largest down payment you are comfortable with. The more you put down, the more equity your start with. Also, if you put 20% down, you avoid paying PMI (Private Mortgage Insurance) for the duration of the loan. PMI can run anywhere from $150 to $400 per month depending on the type and amount of your loan. Think of the saving from that on your 30 year mortgage.
2. Get a 15 year mortgage. The shorter your loan obligation, the less interest you pay overall. There are some mortgage companies that allow you to customize the term of your loan, so check to see if you can get a loan less than a traditional 30 year loan.
3. Improve the property. Some remodeling and improvement projects boost a home’s equity. No all projects do. For example, the price of installing a pool in Arizona does not add the value equal to the expense of the installation. Garage and front door replacements are usually good investments.
4. Pay more on your mortgage. An easy way to accomplish this is to make by-weekly payments. Most people get paid every 2 weeks. If you split your mortgage payment in half, you get the advantage of paying off the interest faster as well as making an additional payment each year. This shortens the length of you mortgage no matter what length it is and adds equity as you go.
5. Use gifts, bonuses and windfalls to add to your monthly payments. You can add additional value without detracting from your normal expenses. This is a painless way to shorten you payment length and add additional equity at the same time.
6. Earmark one person’s salary to make the mortgage payment. If you household has 2 incomes, one can be designated for the mortgage. When raises or bonuses from come it is easy to add those to your payments.
Hopefully some of these ideas hit home and allow you to make decisions that add equity to your home on an ongoing basis. You will enjoy the benefits down the road and give you and your family more flexibility to live a more enjoyable life.
Jerry Johnson - Realtor
Exit Realty - Realty Place
Let us help make your search easier