Ways Homeowners Can Capitalize on Rising Home Equity
A home is one of the most profitable assets a homeowner can have at their disposal. Here’s some advice from members of the Forbes Real Estate Council on how homeowners can capitalize on the growing value of their property’s home equity.
Refinancing or a home equity line of credit are two common options, but stay abreast of the changing market conditions. If your home has appreciated, consider trading up. You may want to think about selling it and then buying two lower cost homes—one as a residence and one as an investment property to diversify your portfolio.
Consider Refinance Options
If your home equity has grown, it’s worth having a conversation with a licensed loan mortgage broker to discuss refinancing your home. With interest rates being historically low, you can refinance your home and lower your interest rate, which lowers your monthly payment. And if you have excess equity, you can take out a Home Equity Line of Credit (HELOC) to stay afloat until times are normal again.
Get a Line of Credit
With equity in your home and interest rates at an all time low, there is not a better time to get a HELOC (home equity line of credit) at very low rates. This can be used to pay down higher interest loans and any other consumer debts that you may have.
Invest In Home Improvements
Soon buyers will return to the market and open house showings will begin again. Be ready by making smart choices when preparing your home for sale. This can greatly increase your profit margin. Neutral colors, refinished floors, new carpeting, upgraded appliances and fixtures all go a long way toward appealing to the current 1st time homebuyer demographic. Dated homes are very un-appealing to the buyer and do not sell for nearly as much as homes with updates and staging.
Embrace Sweat Equity
Pay attention to where new houses are being built and get in early. Construction signs can push up the value of that home. So be open to a house that’s under budget and build its value through remodels and additions. And if you need more income, an addition or “accessory dwelling,” is a way to make that happen. Check with your local planning department for details as they apply to your property.
Invest in Other Real Estate
Leverage your equity by investing in other real estate. There will likely be a number of vacant homes after this pandemic ends. Flips are an ideal investment vehicle for this. And since flipping is a short-term investment, be sure to have a tax reserve because you will have a tax bill due once you’ve successfully “flipped” that investment property.
MortgageDepot can expertly guide you when you want to explore ways to use your home equity to purchase a second home or condo for investment, or to simply refinance to secure a home equity line of credit. There are options available to you.
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