How to Build Home Equity More Quickly
One of the biggest joys of owning a home is that your mortgage payment allows you to build equity in it. Home equity is the difference between your home’s value and what you owe. Some homeowners enjoy building equity so much; they want to know ways they can build it faster. Here we explore ways you can do that.
Make Extra Payments on the Principal Balance.
Adding just a small amount to your regular monthly payment can help you to not only save money in interest but also help you build equity faster. In fact, making just one extra payment annually can help you pay off your loan 7 to 8 years sooner, saving you thousands of dollars in interest. Using bonuses, pay increases or tax refunds to get ahead are great ways to make a big impact without putting a dent in your budget.
Focus on Home Improvement Projects.
Small changes in your home can add up quick! As you upgrade the features in your home, you can exponentially increase the value. You do not have to undergo large renovations or additions to make an impact. Often bathroom upgrades, adding curb appeal or even something as simple as adding hardwood floors can help you increase the return on your investment. It’s important to make sure to do your research to see what will give you the largest bang for your buck. Consulting a realtor and researching online are just two ways to help you spend your money wisely.
Increase the Amount of Money You Use for Your Down Payment.
If you can afford to make a larger down payment, you should. The more money you are able to put towards you home means you can borrow less. This gives you instant equity. Just makes sure you don’t deplete your savings to make your down payment. You want to have a rainy day fund just in case.
Start With a Shorter Term.
Instead of choosing 30-year mortgage, look at a 15-year mortgage instead. You can actually build the equity twice as fast. ENB offers a Wealth Builder Home Loan that is a 15-year mortgage. With this mortgage you can have up to 103% financing and no mortgage insurance is required. You will also get the benefit of below market interest rates locked in for 5 or 7 years.
No matter how you decide to build the equity in your home. You will be sure to increase the value in your investment. If you would like to learn more about building home equity, contact one of our Mortgage Experts by calling us at (877) 773-6605 or send us a message today.