Chuncey Foreman Denver Colorado Realtor & Real Estate

  • Facebook
  • Google+
  • Instagram
  • LinkedIn
  • Twitter
  • Home
  • Free Resources
    • Free Home Evaluation
    • Free Property Alerts
  • Search
    • Advanced Search
    • Map Search
  • Blog & Updates
  • About
    • About Chuncey
    • Testimonials
  • FAQs
  • Contact

Home Equity Can Impact Your Life⏳

February 22, 2021 By Chuncey Foreman

There have been a lot of headlines reporting on how homeowner equity (the difference between the current market value of your home and the amount you owe on your mortgage) has dramatically increased over the past few years. CoreLogic indicated that equity increased for the average homeowner by $17,000 in the last year alone. ATTOM Data Solutions, in their latest U.S. Home Equity Report, revealed that 30.2% of the 59 million mortgaged homes in the United States have at least 50% equity. That doesn’t even include the 38% of homes that are owned free and clear, meaning they don’t have a mortgage at all.

How can equity help a household?

Having equity in your home can dramatically impact your life. Equity is like a savings account you can tap into when you need cash. Like any other savings, you should be sensible in how you use it, though. Here are three good reasons to consider using your equity.

1. You’re experiencing financial hardship 

Equity gives you options during difficult financial times. With equity, you could refinance your house to get cash which may ease the burden. It also puts you in a better position to talk to the bank about restructuring your home loan until you can get back on your feet.

Today, there are 2.7 million Americans who are currently in a forbearance program because of the pandemic. Ninety percent of those in the program have at least 10% equity. That puts them in a better position to get a loan modification instead of facing foreclosure because many banks will see the equity as a form of collateral in a new deal. If you’re in this position, even if you can’t get a modification, the equity allows you the option to sell your house and walk away with your equity instead of losing the house and your investment in it.

2. You need money to start a new business

We’ve all heard the stories about how many great American companies started in the founder’s garage (i.e., Disney, Hewlett Packard, Apple, Yankee Candle, Keeping Current Matters). What we might not realize, however, is the garage (along with the rest of the home) supplied the start-up money for many of these companies in the form of a refinance.

If you’re passionate about an idea you have for a new product or service, the equity in your home may enable you to make that dream a reality.

3. You want to invest in a loved one’s future

It’s been a long-standing tradition in this country for many households to help pay college expenses for their children. Some have tapped into the equity in their homes to do that.  It’s safe to assume a percentage of that down payment money likely came from home equity.

Bottom Line

Savings in any form is a good thing. The forced savings you can earn from making a mortgage payment enables you to build wealth through home equity. That equity can come in handy in both good and more challenging times.

Filed Under: first time homebuyer, home seller, Rent vs. Buy

Recent Posts

  • Should You Rent Your House or Sell It?
  • Where Will You Go If You Sell?🤔
  • Don’t Fear Foreclosure Headlines
  • 3 Factors That Affect Home Affordability
  • JAN 2023/FEB 2023 NEWSLETTER 🎙️
  • Want To Sell Your House? Price It Right.
  • 2023 Pre-Approval: What to Know
  • Have Home Values Hit Bottom?
  • Housing Market during Past Recessions
  • Is It Time To Sell Your Second Home?
* * , *
Equal Housing
Blue Fire Group    Real Estate Websites
© 2023 Copyright
LAC
Buying Buddy    Powered By Buying Buddy ®