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Two Key Factors to Build Your Home’s Equity

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Building a HouseEquity is part of the value of a home you bought. It is the part that you own, which is the amount of the property less any mortgage balances. If you have any plans of selling your home in the future, be sure that you will build enough equity.

Building a home equity takes about two to five years before you can sell it at a profit or without losing money. Learn the ways to build equity faster and make it profitable.

The Property’s Value

As the value of your home increases, the equity rises at the same time. You can begin by making improvements in your home and doing a general makeover, such as installing new doors and windows, updating the appliances and countertops or completing a bathroom and bedroom addition. Also, don’t forget to enhance your home’s landscape appeal to entice future buyers. Make sure that the additions and changes you do will guarantee you a high return on investment.

After making the improvements, proceed with the maintenance. Do routine checking for leaks, cracks or deteriorating roofs and keep it in tip-top shape.

Lastly, the real estate market has a high probability of appreciation and your home’s value can increase up to 25% of its original price within five years. This means your home’s price has a chance to increase automatically, especially if you’re in a growing city or town.

The Mortgage Payment

As you pay off your mortgage regularly, you decrease a portion of interest and principal of your balance, gaining some home equity at the same time. City Creek Mortgage suggests adding an extra payment to your mortgage to quicken the build of equity and decrease an extra portion of your principal balance. This will also shorten the mortgage period and gain a lower interest rest.

In addition, you can make a larger down payment of up to 20% to automatically acquire home equity or much faster. A big down payment will also give you a lower interest in your payments.

Taking care of your home and investing money in it are effective ways of building equity. You will have the peace of mind of selling your home anytime and getting the reward of your hard work.

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