6 Tips for Boosting Equity

6 Tips for Boosting Equity

One of the best ways for homeowners to increase wealth is by boosting the equity of their homes.  The Aitken Home Team presents six tips for boosting equity without blowing your budget:

1. –  Appreciation

 The time it can take to beef up equity via the appreciation route is variable depending on housing market conditions.  Home appreciation is much like the purchase of stock in that it becomes more beneficial as the value increases, however, stock owners are required to pay on capital gains.  Homeowners are not taxed on primary home capital gains valued as high as $250,000.  Married couples have all the luck as they are exempt with gains valued as high as $500,000.  Definitely, something to think about!

2. – Hefty Down Payments

Decreasing monthly mortgage payments and interest is always appealing, however, you could be working against yourself by stashing extra cash away for a healthy down payment in the event that you miss out on the opportunity to boost your home equity via appreciation.  Balance is key when juggling a down payment, savings, and monthly budget plan.  Seek advice from an experienced lender who has a broad knowledge range of the market and the ability to help you strike that perfect balance.

Related: “What’s In Your Wallet?”

3. – Utilize Bonuses

All that overtime, work bonuses, tax rebates, and financial “extras” can make a big dent in your mortgage.  Should you decide to pay down your mortgage via one large payment, ask your lender to recast your payments utilizing the new balance.  You might be surprised at how much less your monthly payments might be.

4. – Reduce the Loan Term

If at all possible, consider a fifteen-year mortgage rather than the usual thirty-year in order to increase your home’s equity at double the speed.  Yes, your monthly payment will be higher and it might be harder to qualify, but you’ll never know if you never try.

5. – Pay Biweekly

Rather than the usual monthly payment schedule, make every effort to pay twice a month.  This will add up to a total of thirteen payments in a year rather than twelve.  You will reduce your thirty-year mortgage by five or six years ad increase the speed at which you accrue equity.  Be sure to verify with your lender that you are not being penalized for biweekly payments.

6. – Renovations

While appliances and paint don’t go very far in adding value to a home, new kitchens and added bathrooms and bedrooms do.  Before beginning any home renovation, research the return on your investment first to make sure you are achieving the added value you hope for.

As always, seek the advice of an experienced lender and professional real estate agent in order to determine the best plan for increasing your home equity.

For more information, contact The Aitken Home Team today!

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Phil Aitken, Owner/Broker
Phil Aitken is the Owner/Broker with Your Home Sold Guaranteed Realty - Phil Aitken Home Team and has over 13 years of Real Estate experience. Phil’s faith and desire for his family’s continued security fuel his business growth and leadership. The Phil Aitken Home Team continues to profoundly impact the people of Jacksonville via supporting several faith-based organizations. Phil gives back a portion of every real estate transaction to The Tim Tebow Foundation and Rethreaded. Find Phil's full story here.