WHAT IS EQUITY?
What is Equity? Am I on the right track?
Understanding Equity is may be the single most important thing to have a grasp on when heading into your next home or investment. For first time home buyers, this may be overwhelming to think about, but with the right people in your corner YOUR PLAN for success can be written out and clear as day.
SImply put, Equity is the difference between your home value and what you owe:
(Equity = Home Value – Home Mortgage)
Purchase right! Equity is not built down the road, but is put on the right track when you go to sign your Purchase Agreement. Yes, you collect your investment when you go to sell, but that collection is often built on decisions made at the beginning! Get with a good Realtor and talk equity while you are out home shopping. Set goals and a personal timeline of where you want your equity to go down the road.
Setting goals cannot be stressed enough. Set your budget on where your extra money goes. Home improvement with time is the best way to slowly build your home Equity. A new couch goes with you in your next move. New floors, new roofing, a great garage door does not. These things significantly add value to your home when you go to sell. Maybe a whole renovation is not in your playing cards, but set a budget for home up-keep and improvements. This ensures that your home value is going up the longer you live there. In the end, you will get the outcome you want!
Are you down the road and have Equity?
Evaluate the market you are in! Call a good Realtor and get a good home evaluation. In 2022, the equation of return on investment is out the door. In a seller’s market there is no question on if it is a good decision. If you have built up your Equity or own your home and you have selling in your mind, this Spring is the right time. How do you know if you are ready? Do not fear that you will miss out on a deal. Do not act out on fear of missing out (FOMO). Sit down, write out your goals, assess where you household is at and if it is time to move forward then the market is ready for you. That is the beauty of the market we are in!
Your interests are first around here. When you are ready to move, give us a call for a free home evaluation. We love working with people and setting them on track to do things RIGHT!