Owning a home can have the advantage of generating equity as time goes by, which can be utilized when selling the property to acquire a new one. However, it is important to comprehend the concept of equity and how it increases before making use of it. According to Bankrate, equity can be defined in the following manner:
“Home equity is the portion of your home you’ve paid off – in other words, your stake in the property as opposed to the lender’s. In practical terms, home equity is the appraised value of your home minus any outstanding mortgage and loan balances.”
Majority of Americans Have a Large Amount of Equity
If you have been a homeowner for some time, it’s probable that you have accumulated a considerable amount of equity, and you may not even be aware of the extent of it. According to information obtained from the U.S. Census Bureau and ATTOM, the majority of Americans currently possess a significant amount of equity, as indicated in the graph below:
Homeowners can reap multiple benefits from possessing substantial amounts of equity. According to Rick Sharga, Executive Vice President of Market Intelligence at ATTOM, the high levels of equity in homes offer security to millions of families and decrease the likelihood of another housing market crisis similar to the one experienced in 2008. As time passes, the equity in your home continues to increase, providing not only financial stability while you are a homeowner but also serving as a significant source of funds to be utilized toward the purchase of your next property when you decide to sell.
Bottom Line
Selling your house and using the equity you have built up can simplify the process of paying for your next home. To determine how much equity you have and to start devising your next steps, it is recommended to connect with a reliable real estate advisor.
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Fri, 17 Mar 2023 18:23:36 +0000
