Although most people’s situation varies, for most people, their home is their biggest asset. For such a major investment, your goal is to get the most out of your money and build equity in your home.
Home equity is the market value of your home minus the amount of money you owe on your mortgage. Having more equity is a good thing as it is an asset that can be used later on in life.
Here are 3 ways to build equity in your home.
Believe it or not, you can build equity on your home without doing anything. How? Your equity increases over time when your home gains value.
If a big company like Starbucks or McDonald’s opens a branch near your home, then you’re in luck. There is no denying that America’s love affair with coffee is going strong. In a study that was conducted by Zillow, they found out that homes that are within a quarter mile of Starbucks increased in value by as much as 96%. Meanwhile, home that are near Dunking Donuts have appreciated in value by 80%.
Another way to increase your home’s equity is by doing some home improvement projects. Keep in mind, though, that not all home improvement projects are created equal. Some will help boost the value of your home, while others may not. To get the most bang for your buck, make sure that you choose projects that will help increase the value of your home.
Kitchen and bathroom renovations, curb appeal improvements, lighting fixtures upgrade, as well as repainting the walls can add significant value to your home.
One of the easiest ways to build equity in your home is to pay your monthly amortization. In order to reap the benefits, make sure that you pay your dues on time. Otherwise, you will incur penalties for not paying your mortgage on time. The penalty could have been used for extra payments that can help increase home equity.
If you have extra money, we encourage you to pay more toward the principal. Overtime, the extra payments will add up and help you build equity on your home.