Many homeowners looking to sell feel like they are stuck between a rock and a hard place right now. Today’s mortgage rates are higher than what they currently have. That’s making it harder to want to sell and make a move. Maybe you are in the same boat.
But what if there was a way to offset these higher borrowing costs? There is. And the money you need probably already exists in your current home in the form of equity.
What is Equity?
Your home’s equity is the difference between how much your home is worth and how much you owe on your mortgage.
Your equity grows as you pay down your loan over time and as home prices climb. Thanks to the rapid home price appreciation we saw in recent years, you probably have a lot more of it than you realize.
The latest from the Census and ATTOM shows more than two out of three homeowners have either completely paid off their mortgages or have at least 50% equity.
That means the majority of homeowners have a game changing amount of equity right now.
How Your Equity Can Help Fuel Your Move
After you sell your house, that equity can help you move without worrying as much about today’s mortgage rates.
“A consideration today’s homeowners should review is what their home equity picture looks like. With the typical home listing price up 40% from just five years ago, many home sellers are sitting on a healthy equity cushion. This means they are likely to walk away from a home sale with proceeds that they can use to offset the amount of borrowing needed for their next home purchase.” (source: Realtor.com)
To give you some examples, here are a few ways you can use equity to buy your next home:
- Be an all-cash buyer: If you’ve been living in your current home for a long time, you might have enough equity to buy your next home without a loan. If that’s the case, you won’t need to borrow any money or worry about mortgage rates.
- Make a larger down payment: Your equity could also be used toward your next down payment. It might even be enough to let you put a larger amount down, so you won’t have to borrow as much at today’s rates.
The First Step: Determine How Much Equity You Have in Your Home
Want to find out how much equity you have? To do that, you will need two things:
1. The current mortgage balance on your home
2. The current value of your home
You can probably find the mortgage balance on your current money mortgage statement. To understand the current market value of your house, you can have an appraisal or you can contact me. An appraisal will be costly. I can prepare for you, at no charge, a professional equity assessment report.
Once you have connected with me and run the numbers, you are one step closer to making a move you may not have thought possible.
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