Four Ways You Can Use Your Home Equity

<article class="post-765995 post type-post status-publish format-standard has-post-thumbnail hentry" id="post-765995"><span class="entry-date">August 7, 2023</span><div class="entry-header center-block text-center"><h1 class="entry-title">Four Ways You Can Use Your Home Equity</h1><div class="shareBlock"><div class="shareTitle">Share</div><div class="shareIcons"><a aria-label="Twitter Share Link" class="twitter solid display-inline-block" data-tracking="Post,Social Post Link Clicked,Twitter" href="http://twitter.com/share?text=Four+Ways+You+Can+Use+Your+Home+Equity&amp;url=https%3A%2F%2Fgilliggroup.com%2Fblog%2Ffour-ways-you-can-use-your-home-equity%2F" target="_blank"><span class="force-hidden">Twitter</span></a>
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</div></div><div class="post-tax post-category"><span></span><a href="../category/realtor-blog/index.html" rel="tag">Realtor Blog</a></div><div class="post-tax post-post_tag"></div></div><div class="entry-content"><div><img alt="Four Ways You Can Use Your Home Equity Simplifying The Market" decoding="async" loading="lazy" src="https://media.agentaprd.com/sites/222/20230807-Four-Ways-You-Can-Use-Your-Home-Equity.webp" style="display: block; margin-bottom: 5px; clear: both; max-width: 100%;" width="358"/>
<p>If you’re a homeowner, odds are your <a href="https://www.simplifyingthemarket.com/2023/06/16/how-owning-a-home-grows-your-wealth-with-time-infographic/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">equity</a> has grown significantly over the last few years. <a href="https://www.simplifyingthemarket.com/2023/07/20/owning-your-home-helps-you-build-wealth/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">Equity</a> builds over time as home values grow and as you pay down your home loan. And, since home prices skyrocketed during the <a href="https://www.simplifyingthemarket.com/2023/05/30/todays-real-estate-market-the-unicorns-have-galloped-off/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">‘unicorn’ years</a>, you’ve likely gained more than you think.</p>
<p>According to the latest <a href="https://www.corelogic.com/press-releases/corelogic-us-home-borrowers-see-first-annual-home-equity-losses-since-2012-in-q1-2023-but-overall-mortgage-performance-remains-strong/" rel="noopener noreferrer" target="_blank"><em>Equity Insights Report</em></a> from <em>CoreLogic</em>, the <strong>average homeowner has more than $274,000 in equity right now</strong>. That much equity can help you achieve certain goals. In a recent article, <em>Bankrate</em> <a href="https://www.bankrate.com/home-equity/homeowner-equity-data-and-statistics/#negative-equity" rel="noopener noreferrer" target="_blank">elaborates:</a> </p>
<blockquote><p>“<em>While the pandemic created serious challenges, the silver lining for anyone who owned a home was the sizable equity gain. Understanding how home equity works, and how to leverage it, is important for any homeowner</em>.”</p></blockquote>
<p>Here are a few examples of how you can put your home equity to work for you.</p>
<h4><strong>1. Buy a Home That Fits Your Needs</strong></h4>
<p>If your current space no longer meets your needs, it might be time to think about moving to a bigger home. And if you’ve got too much space, <a href="https://www.simplifyingthemarket.com/2023/07/07/the-benefits-of-downsizing-for-homeowners-infographic/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">downsizing</a> to a smaller home could be just right. Either way, you can put your equity toward a down payment on a home that fits your changing lifestyle.<strong style="color: rgb(0, 174, 255);"> </strong>A real estate agent can help you figure out how much equity you’ve got and how to use it when buying your next home.</p>
<h4><strong>2. Reinvest in Your Current Home</strong></h4>
<p>Renovations are a great option if you want to change your living space, but you aren’t yet ready to make a move. Home improvement projects give you the freedom to tailor your home to match your needs and personal style. But it’s important to consider the long-term benefits certain upgrades can bring to your home’s value. Lean on a real estate professional for the best advice on which improvement projects to prioritize in order to get the greatest return on your investment when you sell later on.</p>
<h4><strong>3. Pursue Personal Ambitions</strong></h4>
<p>Home equity can also serve as a catalyst for realizing your life-long dreams. That could mean investing in a new business venture, retirement, or funding an education. While you shouldn’t use your equity for unnecessary spending, using it responsibly for something meaningful and impactful can really make a difference in your life.</p>
<h4><strong>4. Understand Your Options to Avoid Foreclosure</strong></h4>
<p><span style="color: black;">Today the number of </span><a href="https://www.simplifyingthemarket.com/2023/07/24/foreclosure-numbers-today-arent-like-2008/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">foreclosure filings</a><span style="color: black;"> remains below the norm, so there’s no need to fear a wave of foreclosed homes flooding the market. But unfortunately, there are still some homeowners who experience the foreclosure process each year. If you’re facing financial difficulties, having a clear understanding of your options and how your equity can help is crucial. Equity can act as a financial cushion that can be used in times of unexpected challenges or unforeseen circumstances that may disrupt your ability to make mortgage payments on time.</span></p>
<p><span style="color: black;">In an article,</span><em style="color: black;"> Freddie Mac</em><span style="color: black;"> </span><a href="https://myhome.freddiemac.com/blog/homeownership/how-selling-equity-can-help-you-avoid-foreclosure" rel="noopener noreferrer" target="_blank">explains</a><span style="color: black;"> it this way:</span></p>
<blockquote><p><span style="color: black;">“</span><em style="color: black;">If exiting your home is the best option for you, selling with equity may be a good option. When selling with equity, you are using the proceeds from selling your home at a higher price than the amount you owe on your mortgage to pay off your remaining mortgage debt</em><span style="color: black;">.”</span></p></blockquote>
<h3>Bottom Line</h3>
<p>Your equity can be a game changer in reinvesting in your needs, pursuing your goals, and even helping you avoid foreclosure during difficult times. If you’re unsure how much equity you have in your home, connect with a local real estate professional so you can start planning your next move.</p>
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