Access Your Equity

The housing market has been hot this summer. The data stemming from this market has been even hotter. Turns out, while you were busy having fun, your home was increasing in value. According to research recently released by Zillow, home values in the Greater Boston Area have been up as much as 16% since 2013. What this boils down to for the average homeowner is one thing: EQUITY!

What is Equity?

A home’s equity is the difference between the fair market value and any liens on the property. If you owe $100,000.00 and the value is $250,000.00 that gives you $150,000.00 in equity and puts your loan to value (LTV) at 40%.

How do I know how much equity I have?

While we have access to databases that can estimate your home’s value, a Residential Appraisal is required on most loans. A licensed Appraiser would visit your home and determine its value based on the recent sales of similar homes.

What Can I do with Equity?

Save Money.

If you’re currently paying a higher interest rate, you may be able to lower your interest cost. If you’re currently paying Mortgage Insurance and you have at least 20% equity, you can refinance and remove that monthly cost, too.

Get Money.

With a Cash-Out refinance, you can turn the equity in your home into money in your wallet. You can borrow up to 80% of your home’s value without mortgage insurance.

Nothing.

Just because home values have gone up, that does not necessarily mean YOU need to do anything about it. You can always wait to take advantage of equity until you sell or refinance. Continue building your equity by: making improvements with a high rate of return, keeping up with maintenance, and by making additional mortgage payments when you can.