Dan DiMaria Archives - David’s Vacation Escapes Real Estate Services

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…

Learn how much you can afford on a mortgage for a new home.

Here are the ABC’s of finding a dream house that you can reasonably afford.

HOUSE POOR [adjective | hous – poo·r] A person who can afford his or her home mortgage payments, but can’t afford much of anything else. Discretionary spending on restaurants, furnishings, travel and clothes are severely cut back, due to a large proportion of his or her income going towards the mortgage payments, upkeep costs, and energy/utility bills.

Sure, you want a nice home. But you also want to make sure that it fits in the landscape of the rest of your life.