Ways Your Home Equity Can Help You Reach Your Goals

<article class="post-902767 post type-post status-publish format-standard has-post-thumbnail hentry" id="post-902767"><span class="entry-date">January 9, 2024</span><div class="entry-header center-block text-center"><h1 class="entry-title">Ways Your Home Equity Can Help You Reach Your Goals</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=Ways+Your+Home+Equity+Can+Help+You+Reach+Your+Goals&amp;url=https%3A%2F%2Fgilliggroup.com%2Fblog%2Fways-your-home-equity-can-help-you-reach-your-goals%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="Ways Your Home Equity Can Help You Reach Your Goals Simplifying The Market" decoding="async" loading="lazy" src="https://media.agentaprd.com/sites/222/20240109-Ways-Your-Home-Equity-Can-Help-You-Reach-Your-Goals.webp" style="display: block; margin-bottom: 5px; clear: both; max-width: 100%;" width="358"/>
<p>If you’ve owned your house for at least a <a href="https://www.simplifyingthemarket.com/2023/12/27/retiring-soon-why-moving-might-be-the-perfect-next-step/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">couple of years</a>, there’s something you’re going to want to know more about – and that’s home equity. If you’re not familiar with that term, <em>Freddie Mac</em> <a href="https://myhome.freddiemac.com/owning/equity-and-appreciation" rel="noopener noreferrer" target="_blank">defines</a> it like this:</p>
<blockquote><p><em>“. . . your home’s equity is </em><strong><em>the difference between how much your home is worth and how much you owe on your mortgage</em></strong><em>.”</em></p></blockquote>
<p>That means your equity grows as you pay down your home loan over time and as <a href="https://www.simplifyingthemarket.com/2023/12/04/experts-project-home-prices-will-rise-over-the-next-5-years/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">home values climb</a>. While it’s true <a href="https://www.simplifyingthemarket.com/2023/11/22/home-prices-still-growing-just-at-a-more-normal-pace/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">home prices</a> dipped slightly last year, they <a href="https://www.simplifyingthemarket.com/2023/11/14/home-prices-keep-climbing-in-most-markets/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">rebounded</a> and have been climbing in many areas since then. Here’s why that price growth is good news for you.</p>
<p>In the latest <a href="https://www.corelogic.com/intelligence/homeowner-equity-insights-q3-2023/" rel="noopener noreferrer" target="_blank"><em>Equity Insights Report</em></a>, Selma Hepp, Chief Economist at <em>CoreLogic</em>, explains:</p>
<blockquote><p><em>“</em><strong><em>With price gains continuing to help homeowners build wealth, equity has reached a new high and regained losses that resulted from declines last year</em></strong><em>. And while the average U.S. homeowner gained over $20,000 in additional equity compared with the third quarter of 2022, some markets are seeing larger increases as price growth catches up.” </em></p></blockquote>
<p>And that figure is just for the last year. To help you really understand how that number can add up over time, the report also says the average homeowner with a mortgage has more than $300,000 in equity. That much equity can have a big impact.</p>
<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 <a href="https://www.simplifyingthemarket.com/2023/11/16/people-are-still-moving-even-with-todays-affordability-challenges/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">moving</a> to a bigger home. And if you’ve got too much space, downsizing to a smaller one could be just right. Either way, you can put your equity toward a down payment on something that fits your changing lifestyle.</p>
<h4><strong>2. Reinvest in Your Current Home</strong></h4>
<p>And, if you’re not ready to move just yet, you can use the equity you have to improve your current home. But it’s important to consider the long-term benefits certain upgrades can bring to your home’s value. A real estate agent is a great resource on which projects to prioritize 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>While the number of <a href="https://www.simplifyingthemarket.com/2023/10/31/foreclosures-and-bankruptcies-wont-crash-the-housing-market/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">foreclosure filings</a> remains below the norm, there are still some homeowners who go into foreclosure each year. If you’re in a tough spot financially, having a clear understanding of your options can help. Equity can act as a cushion if you’re not able to make your mortgage payments on time.</p>
<h3>Bottom Line</h3>
<p>If you want to know how much equity you have in your home, connect with a local real estate agent. They can do a professional equity assessment report on how much you’ve built up over time and talk you through how you can use it to help you reach your goals.</p>
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