Blog The McNelly Team Breaks Down the Complex World of Home Equity: Tips for Homeowners Jun 13, 2024

Home equity is a term that you may have heard before, but do you truly understand what it means and how it can benefit you as a homeowner? The McNelly Team is here to break down the complex world of home equity and provide you with valuable tips to make the most of this important asset. Home equity is essentially the amount of your home that you truly own. It is calculated by subtracting the amount you owe on your mortgage from the current market value of your home. For example, if your home is worth $300,000 and you still owe $200,000 on your mortgage, you have $100,000 in home equity. Home equity can be a valuable financial resource for homeowners, as it can be used in a variety of ways to improve your financial outlook. One of the most common uses of home equity is to take out a home equity loan or line of credit. These types of loans allow you to borrow against the equity in your home and use the funds for things like home improvements, debt consolidation, or other major expenses. Because they are secured by the value of your home, home equity loans typically have lower interest rates than other types of loans, making them an attractive option for many homeowners. Another option for tapping into your home equity is a cash-out refinance. With a cash-out refinance, you refinance your existing mortgage for a higher amount than you currently owe and take the difference in cash. This can be a good option if you want to access a large sum of money at once, but it's important to consider the additional costs and potential risks involved. The McNelly Team recommends working with a trusted mortgage professional to explore your options and determine the best course of action for your individual situation. In addition to borrowing against your home equity, there are other ways to increase the equity in your home. Making regular mortgage payments and keeping up with home maintenance and improvements can help to build equity over time. Additionally, rising property values in your area can also boost your home equity. If you're considering selling your home in the future, having a higher amount of equity can make it easier to sell your home for a profit and potentially afford a larger or more expensive home in your next purchase. The McNelly Team understands that navigating the world of home equity can be overwhelming, but we are here to help. Our team of experienced mortgage professionals can provide you with personalized guidance and assistance to help you make the most of your home equity. Whether you're interested in taking out a home equity loan, exploring a cash-out refinance, or simply looking to increase the equity in your home, we have the knowledge and expertise to help you achieve your financial goals. Contact The McNelly Team today to learn more about how home equity can work for you and your unique situation.