Equity can be defined as the difference between the value of the assets and the cost of the debt owed. For example if someone owns a house worth $100,000 and owe $80,000 on the home, that home represents $20,000 or 20% worth of equity. Many homeowners with more than 20% equity in their homes would be able to use that equity as a down payment on either a larger home or even a retirement home.
CoreLogic’s latest Equity Report revealed that 92% of all mortgaged properties are now in a positive equity situation, while 74% now actually have significant equity (defined as more than 20%)!
Frank Nothaft, CoreLogic’s Chief Economist, explains:
“In just the last four years, equity for homeowners with a mortgage has nearly doubled to $6.9 trillion. The rapid increase in home equity reflects the improvement in home prices, dwindling distressed borrowers and increased principal repayment. These are all positive factors that will provide support to both household balance sheets and the overall economy.”
Anand Nallathambi, President & CEO of CoreLogic, believes this is a great sign for the market in 2016 as well, as he had this to say:
“More than one million homeowners have escaped the negative equity trap over the past year. We expect this positive trend to continue over the balance of 2016 and into next year as home prices continue to rise. Nationally, the CoreLogic Home Price Index was up 5.5% year-over-year through the first quarter. If home values rise another 5% uniformly across the U.S., the number of underwater borrowers will fall by another one million during the next year.”
Equity is a large resource that many homeowners are not sure about. They are unsure about if they have any and how much they have. By reaching out to your Wisconsin Mortgage Loan Officer, they can keep you updated on your current equity situation. Then your Shorewest, REALTOR® can start your home buying journey! If you are one of the many Americans who are unsure of how much equity you have in your home, don’t let that be the reason you fail to move on to your dream home this year! #ShorewestRealtors #WIMort #Equity
Source Credit: Keeping Current Matters