Unlock the Wealth in Your Home: How Home Equity Can Fuel Your Dreams

Have you ever considered the large amount of wealth you have amassed simply from owning a home? Do you know that many consider it the most important asset in their investment portfolios? Can it be any investment for residential purposes? Crazy talk, I know. Home values going up leads to a growth in your net worth. You probably have a lot of equity after living in your house for years—maybe even more than you realize. Let's examine home equity, noting its increase along with how it may be used.

Home equity is the exact amount remaining after subtracting the outstanding mortgage balance from your house's present value. If a home is valued at $500,000 and $200,000 is still owed on the mortgage, equity comes to $300,000.

Homeowners across the country currently have record-high equity, the wealth built through homeownership! About $319,000 in home equity is held by the average homeowner with a mortgage, according to Intercontinental Exchange (ICE).

Over the years, home equity has substantially risen due to a couple of major factors:

1. Home prices increased a lot.
Home prices have greatly increased during the past few years. The Federal Housing Finance Agency (FHFA) states that home prices nationwide have increased by 57.4% over the past five years. That means the worth of your home is very likely greater now than it was when you purchased it.

Longer home time.
Homeowners are staying in their residences for an extended duration. Data from the National Association of Realtors (NAR) indicates people are now spending about 10 full years in their homes. Homeowners can profit from the increase in home prices over the long run, greatly building their equity.

NAR actually reports that the average homeowner's wealth has increased by $201,600 because of rising prices over the last ten years.

Home equity is not just a number; it’s a very powerful financial tool able to create many opportunities. Here is how to use all your equity:

Moving to each next home.
If you want to upgrade, downsize, or move, a portion of your equity might help pay the full down payment on your following home. It could even enable a cash purchase of the next property.

2. Financing Home Improvements
Are you dreaming of remodeling the kitchen or adding a home office? Your equity can pay for these upgrades, which raises your home’s value and makes your daily life better.

3. Starting a Business
Equity might make your business dreams a reality. Funding startup costs, purchasing equipment, or marketing your business are ways your home’s value can help make your vision real.

Your house is both a location where you live and a very important financial asset. Many aspirations, including planning a next move, dreaming of renovations, or exploring entrepreneurial goals, can be achieved through home equity.

Are you wondering about the total equity that you have built or all of the ways that you can use it? Connect with me, your dedicated Denver real estate expert, to thoroughly explore your options along with completely maximizing this fantastic resource.