What is Home Equity
In a nutshell home equity is the difference between how much you owe on your mortgage and your home's current value. A good example would be if you owe $200,000 on your home and it's value or the amount it could possibly sell for is $250,000 you currently have $50,000 in equity. In today's market there has been a lot of headlines reporting how homeownership equity has increased over the past few years. Mainly because of the increase of home prices.
Having equity in your home can positively impact your life. The equity in your home is like a saving account you are allowed to borrow from in time of need. It is recommended a homeowner use the equity in a sparing way. Below are a three reasons to consider using the equity in your home.
The equity in your home can give you options during difficult times. It allows the homeowner to refinance their house and get cash out to help during difficult times. For more information about borrowing the equity in your home talk to a Mortgage Professional.
Starting a Business
Many times homeowners may want to start a new business venture and need some capital. The may be passionate about an idea for a new product or service and the homes equity may be able to make that dream a reality.
Perhaps you or a you child need money for college. Using the equity in your home to pay for educational expenses is one way. For many this is an up-tapped resource to make obtaining that degree or certificate.
Having savings is always a good thing. But building equity from a forced saving like a mortgage enables you to build wealth over time. Contact a Mortgage Professional about the Pros and Cons of a home equity loan.