| BUILDING EQUITY IN YOUR HOME COULD MAKE YOUR NEXT MOVE POSSIBLE |
| Are you a homeowner who wants to sell because you’d like to move up to accommodate an expanding family or downsize after the kids have moved out? Or are you looking for your first home or know someone who might be hesitant to move because the mortgage rate they might get today could be higher than if they wait? Fortunately, home equity can help current owners keep their future monthly mortgage payments within budget, and future homebuyers will be able to begin building equity rather than spending money on rent. |
| What Is Home Equity? Mortgage giant Freddie Mac explains home equity as a simple equation. It’s the difference between how much your home is worth on the market now and how much you currently owe on your mortgage. When you buy a home, part of your monthly mortgage payment goes to building your home equity by paying down what you owe on the loan. When you sell, after you pay off the mortgage, you receive this money, plus your original down payment, plus the equity that built up as your home’s value grew. |
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| Two Out of Three Homeowners Have at Least 50% Equity in Their Homes. Recent statistics from the U.S. Census Bureau and Attom Data reports that 67.1% of homeowners—more than two out of three—have at least 50% equity in their homes. Almost 40% of homeowners own their homes free and clear, and more than 28% have a mortgage and have amassed more than 50% equity in their homes. |
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| Here’s How It Works. When you sell your house, the equity you’ve built up can let you move without worrying that the current mortgage rate will take your monthly payment beyond your budget. Depending on your amount of home equity, that payment may even be less. Realtor.com reports that the typical home listing price is up 40% from only five years ago, and so many home sellers have “a healthy equity cushion.” Homeowners can use that equity to make a larger down payment and reduce the amount they need to borrow for the next home. |
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| First, Find Out How Much Home Equity You Have. To figure out how much home equity you have, you’ll need to know: 1) your current mortgage balance; and 2) your home’s current value. You’ll find the mortgage balance—the amount you have left to pay on your mortgage—on your latest monthly statement. To find the current market value of your house, contact a local real estate agent, who can give you, at no cost, a professional equity assessment report (PEAR). Reach out to us to help you run the numbers. You may see that your next move is readily possible, thanks to the amount of home equity you didn’t know you had! |
The Jim Passi Team at Citywide Home Loans proudly serves Illinois, Wisconsin, Michigan, Indiana, Georgia and Flordia. If you are looking to buy a home or refinance, we have you covered. Apply Now to get started.
