Hesitant about putting your house on the market? Despite a more accessible market this year, the decision to sell can still seem daunting. However, a deeper understanding of your home equity might just tip the scales in your favor. As defined by Bankrate, home equity is the current value of your home minus any outstanding mortgage balance. It's essentially the portion of your property that you truly "own" — starting from your initial down payment and increasing as you pay down your mortgage and as your home's value appreciates over time.
This financial metric is more straightforward than you might think: take your home's present value and subtract what you still owe on your mortgage. Chances are, thanks to the recent surge in home prices, your equity has grown substantially, possibly more than you realize.
Maximizing Your Home Equity Today
For those contemplating a move, your home's equity could play a pivotal role. CoreLogic's research highlights that the average homeowner with a mortgage has amassed over $300,000 in equity.
A significant portion of homeowners are in a robust equity position, with Census and ATTOM data revealing that around 70% of mortgage holders have either paid off their homes entirely or have accumulated at least 50% equity:
This sizable equity can be leveraged in several ways to facilitate your transition to a new home:
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Become an All-Cash Buyer: For long-term homeowners, your accrued equity might cover the cost of your next purchase in full, allowing you to bypass loans and ignore fluctuating mortgage rates. Investopedia notes the competitive edge and savings on mortgage interest that cash purchases can provide in hot markets.
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Boost Your Down Payment: Alternatively, your equity can serve as a hefty down payment on your next property, reducing the need for extensive financing. The Mortgage Reports points out that larger down payments often secure more favorable loan terms from lenders, as it lowers their risk.
Discovering Your Equity
Curious about your equity? A Professional Equity Assessment Report (PEAR) from a trusted real estate expert can offer clarity.
Closing Thoughts
If you're planning to sell in South Florida, from Miami Beach to Coral Gables, your home equity could be a game-changer, enabling smoother transitions and more strategic financial decisions. Ready to explore how your equity can work for you? Let's discuss your options and pave the way for your next property venture.
