As a homeowner, buying a house is one of the largest investments you can make. It should be viewed as an investment that needs to be protected and nurtured as part of preparing for the future. You can do this by increasing your home equity, and ensuring that its value increases over time. It’s good to know that home values in most North American neighbourhoods increase on their own. The United States and Canada are two of the most advanced nations on the globe, and their real estate continues to appreciate in value. This has been the case for decades. But, just how can a homeowner build equity in their home? Is there a way to accelerate this process, other than making timely mortgage payments? We recently spoke with the Home Equity Loan Experts of Toronto-based Homebase Mortgages to get their insight into the easiest way to accomplish this.
Why Build Home Equity?
Home equity can be compared to a special savings account. Home equity can be used to finance other investments, such as education, starting a new business, putting down payment on a rental home, or renovating an existing home to increase its value. Home equity increases in value as the value and value of a home increase.
To build home equity, you must first know how much equity you have. Calculate your current home equity to help you plan how to build more and determine which tips are most applicable to your situation.
Tips for Building Home Equity Faster
Tip # 1 – Although the first tip for building equity in your home may have been a bit late, it is still worth noting if you are planning to purchase a house. Make the largest down payment you can. Your mortgage interest rate may be significantly reduced if you make a large down payment. This will also allow you to pay more. Your down payment also represents your home equity.
Tip # 2 – Get an affordable mortgage. You should choose the 15-year mortgage if you can afford it. You may pay more for the mortgage, but you’ll gain equity in your home faster and save money on interest.
Tip # 3 – Pay more for your mortgage. Paying as much each month as you can afford on your mortgage may work wonders, depending on the type of mortgage. This is true, especially if you credit your payments properly to your mortgage principal. Allocating any additional income or bonuses to mortgage payments will allow you to pay more. You will be surprised by the impact that a few extra years of mortgage payments can have on your financial health.
Tip # 4 – As AJ Makkunel, a home equity loan specialist with Mortgage Central Canada explains, “spending money on home improvements to increase equity is the fastest and most reliable way to increase your home’s value. Renovations and remodelling can be expensive, but they increase the value of your home. This can dramatically increase your equity”.
You’ll have a stronger financial position once you build up your home equity. This will make it easier to access funds if you ever need them. Your home equity can be used as a retirement account! You can contact your local home equity lenders with any questions if you want to learn more about how to access your home equity or build it now. These loans can help you unlock untapped wealth.
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