Due to covid-19 there are rapidly rising home values, many Americans are now equity rich…
In fact, a recent report from data firm Black Knight found that the average U.S. homeowner has $153,000 in “tappable” home equity — an all-time high…
That pent-up wealth can be put to work making home renovations, paying off debts, buying new properties, investing, and more…
Having equity means you have cash value built up in your home. Your equity will grow year by year as you pay off your mortgage and as your home (likely) increases in value.
Of course, equity isn’t liquid cash. The wealth built up via home equity is tied into your property’s value.
That means you can’t just spend your home equity. To put the money to work, you first have to convert home equity into liquid cash. This is typically done via a cash-out refinance loan or a second mortgage (more information on this below).
But first, here’s how you can determine whether you have equity available to cash out…
How to calculate your home equity…
Calculating home equity is simple. Just take the current value of your home minus your mortgage balance today.
- Suppose your home is worth $350,000
- Your mortgage balance is $110,000
- Your total equity is $240,000 ($350,000 – $110,000 = $240,000)
Note: Your home’s current value likely won’t be the same as what you paid for it unless you bought the property very recently. To get a current estimate — factoring in-home price inflation — you can check recent sales prices of similar homes nearby on real estate listing sites, or use an online estimation tool.
Contact Dan DiMaria, Fairway Mortgage Branch Manager – Reverse Mortgage Specialist https://www.fairwayindependentmc.com/Dan-DiMaria or direct line at tel: 1-312-363-9595 for more information on refinancing your home…
Thank You For Reading, Dave Rigney, Real Estate Broker In The Chicago Land Area… [email protected]
