Here are a few ways to use your equity to build wealth over time.

Equity is the difference between how much your home is worth and how much you still owe on your mortgage. You build equity up by paying down your mortgage or through your home’s year-over-year appreciation. As with any investment, there can be risks involved with purchasing real estate. For instance, home values can depreciate due to economic conditions, the home’s condition, or neighborhood decline. However, our current market is red-hot, and prices are on the rise.

One way to use your equity is to open a home equity line of credit, otherwise known as a HELOC. They allow you to withdraw funds to use for home improvements or even high-interest debt. These loans often come with a variable interest rate, meaning your payment can go up or down based on the loan’s lifetime. Once the loan is paid down, you have the option to borrow on it again. It’s critical to discuss the terms of this type of loan with your lender so that you fully understand your payback options and use the loan responsibly.

“Explore your options with a real estate professional so that you can find out how much equity you’re able to tap into.”

Have you ever thought of owning an investment property to build wealth and gain passive income? By tapping into your home’s equity, you may be able to cash out some equity to use as a down payment or to purchase another home outright and turn it into a rental. You could put the rental income toward the current monthly payments of your investment in addition to supplementing your income.

The next step in building wealth using your equity is to explore your options with a real estate professional so that you can find out how much equity you’re able to tap into. If you don’t currently own a home, no problem! We can also help you form a plan so you can secure a home and start building equity of your own.

There are many tools available to help you understand how much equity is in your home, and we’d love to help you. Look to us as your trusted real estate advisors. Call, text, or email us to learn more about building wealth using real estate.