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Your Equity Could Make a Move Possible

Monday, June 10, 2024   /   by Amy Richardson

Your Equity Could Make a Move Possible

Many homeowners looking to sell feel like they’re stuck
between a rock and a hard place right now. Today’s mortgage rates are higher
than the one they currently have on their home, and that’s making it harder to
want to sell and make a move. Maybe you’re in the same boat.

But what if there was a way to offset these higher borrowing
costs? There is. And the money you need probably already exists in your current
home in the form of equity.

What Is Equity?

Think of equity as a simple math equation. Freddie Mac
explains:

“. . . your home’s equity is the difference between how
much your home is worth and how much you owe on your mortgage.”

Your equity grows as you pay down your loan over time and as
home prices climb. And thanks to the rapid home price appreciation we saw in
recent years, you probably have a whole lot more of it than you realize.

The latest from the Census and ATTOM shows more than two out
of three homeowners have either completely paid off their mortgages (shown in
green in the chart below) or have at least 50% equity (shown in blue in the
chart below):

home equity

That means the majority of homeowners have a game-changing
amount of equity right now.

How Your Equity Can Help Fuel Your Move

After you sell your house, that equity can help you move
without worrying as much about today’s mortgage rates. As Danielle Hale, Chief
Economist for Realtor.com says:

“A consideration today's homeowners should review is what
their home equity picture looks like. With the typical home listing price up
40% from just five years ago, many home sellers are sitting on a healthy equity
cushion. This means they are likely to walk away from a home sale with proceeds
that they can use to offset the amount of borrowing needed for their next home
purchase.”

To give you some examples, here are a few ways you can use
equity to buy your next home:

Be an all-cash buyer: If you’ve been living in your
current home for a long time, you might have enough equity to buy your next
home without having to take out a loan. If that’s the case, you won’t need to
borrow any money or worry about mortgage rates.

Make a larger down payment: Your equity could also be
used toward your next down payment. It might even be enough to let you put a
larger amount down, so you won’t have to borrow as much at today’s rates.

The First Step: Determine How Much Equity You Have in
Your Home

Want to find out how much equity you have? To do that,
you’ll need two things:

 

·      
The current mortgage balance on your home

·      
The current value of your home

You can probably find the mortgage balance on your monthly
mortgage statement. To understand the current market value of your house, you
can pay hundreds of dollars for an appraisal, or you can contact a local real
estate agent who will be able to present to you, at no charge, a professional
equity assessment report (PEAR).

Once you’ve connected with a trusted local agent and run the
numbers, you’re one step closer to making a move you may not have thought was
realistic – all thanks to your equity.

 

Bottom Line

If you want to find out how much equity you have and talk
more about how it can make your next move possible, let’s connect.

 

 

Source: Real Estate with Keeping Current Matters


  homebuyers, mortgage rates, homeowners, home equity

Home Smart - Savvy Realty Group
Amy Richardson
6909 W Ray Rd #21
Chandler, AZ 85226
602-448-8081

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