What Is Home Equity And How Can It Be Used?

Home equity refers to the portion of your property that you truly "own." It's the difference between your home's market value and the amount you owe on any mortgage or other liens against the property. For instance, if your home is worth $300,000 and your remaining mortgage balance is $200,000, your home equity would be $100,000 ($300,000 - $200,000). This number changes as the real estate market shifts, with the amount your home is worth fluctuating as the market moves up or down. Here in the Gainesville area we have had several years of home value appreciation, adding to the amount of equity the average homeowner in Gainesville has in their property. An experienced real estate professional will be able to help you assess what your home could potentially be worth in today’s market to help you find out how much equity you have. Home equity is a powerful tool that can be used in a number of ways, take a look at some of the most common uses:

• Home Improvements: Using your home equity to renovate or improve your property can potentially increase its value. This might include kitchen remodeling, adding a bathroom, or making energy-efficient upgrades.

• Debt Consolidation: You can use home equity to consolidate high-interest debts, such as credit card balances or personal loans, by taking out a home equity loan or a home equity line of credit (HELOC). This may provide a lower interest rate compared to other types of loans.

• Investment: Some people leverage their home equity to invest in other properties or investment opportunities. This allows them to own properties that they can rent out for passive income without having to save for a down payment. 

If you want to find out how much equity you have in your home or discuss some potential options to take advantage of your equity, give our team a call today! We would love to help you make the most of the equity that you have been building in your home.

To learn more about home equity, take a look at this article from Freddie Mac.