One of the reasons why people prefer to buy their own homes rather than renting housing services from somebody else is that they want to build up equity. In other words, they want to invest in their homes by paying into a mortgage, build up their own ownership, and establish some wealth.
But building equity is no mean feat. For starters, most mortgages usually last about 20 years, sometimes 30. That’s a long time to spend building up equity in your home, and most people don’t want to wait that long. What’s more, things are made even worse by the current situation regarding low pay and low savings. Many people just aren’t making enough money every month to put extra aside to build up their mortgage faster.
So, with that said, what can you do to build equity in your home fast?
One of the best ways to build up equity in your new home is to sell your old home for more money. If you haven’t moved yet, consider home staging as a way to increase the value of your property. While it might seem expensive at the time, features like granite worktops and steel appliance scan dramatically add value to your home and help you get a leg up on the next rung of the property ladder.
Increase Monthly Payments
Property owners can shorten their mortgages considerably by ripping their monthly payments, according to homeequitylineof.credit. The website says that it’s entirely possible to transform a thirty-year mortgage into a fifteen-year fixed rate mortgage, reducing the amount of interest paid overall. Remember, every time you make a mortgage payment, you gain equity.
Buy In An Up-And-Coming Area
Many new homeowners believe that if they want to add equity to their homes quickly, they need to buy in an expensive area. But it’s not the value of the home that matters when it comes to equity, but the amount by which a home’s value rises after you’ve bought it.
Let’s say you purchase a home for $200,000. You put down a $30,000 deposit giving you $30,000 in equity. Now let’s suppose that real estate prices in the vicinity of your home rise by 10 percent because some large business moves into the area. Now your home’s sticker price is $220,000, and you just made $20,000 extra in equity.
This is why smart homebuyers look for areas with potential that are yet to be discovered by the rest of the market. Look out for regions which are attracting new, high-value retail stores as this is usually an indicator that they are about to experience growth and development.
Maintain Your Home
Not only do you want to upgrade your old home, but you also want to keep your new home in good condition, according to http://www.businessinsider.com. Why? Because letting it fall into disrepair will cause it to fall in value reducing any equity you might have built up in the property. Keep a monthly maintenance schedule.