What is equity and how does it affect you as a homeowner? Equity is defined as the difference of the home’s fair market value and the outstanding balance of all other debt on the property. Many homeowners are unaware of how much equity they have built up in their homes, particularly with today’s increasing home prices. Homeowners with significant equity (more than 20%) are in a position to upsize or downsize with ease to better fit their current situation. You can use this 20% equity toward a down payment on a larger home or retirement home.
For example, if you have a $200,000 home and have $50,000 left to pay, you have equity of $150,000 that you will be able to credit to your next home. As you can see, homeownership builds you an automatic savings account.Many Americans have an opportunity to take advantage of the seller’s market today. If you are unsure of how much equity you have in your home, don’t let that be the reason you fail to move into your dream home this year. A Shorewest, REALTOR® will be able to help you evaluate your situation and help you on your real estate journey! #ShorewestRealtors #Equity