Leveraging Your Home Equity is Key When Considering a Move

Considering selling your home but unsure due to the current market’s affordability challenges? While it’s true that affordability might be tighter this year, there’s a silver lining: your home equity. An article from Bankrate sheds light on this:

“Home equity is the difference between your home's value and the amount you still owe on your mortgage. It represents the paid-off portion of your home.

You'll start off with a certain level of equity when you make your down payment to buy the home, then continue to build equity as you pay down your mortgage. You'll also build equity over time as your home's value increases.”

View equity as a straightforward calculation: the current value of your home minus the remaining mortgage balance. Surprisingly, your equity might have increased more significantly than anticipated.

With a surge in home prices in recent years, both the value of homes and the equity of homeowners have seen substantial increases. This means you could possess more equity than you’re aware of.

Leveraging Your Home Equity Effectively Today

Considering a move? The equity in your current home could play a crucial role. CoreLogic reports:

“. . . the average U.S. homeowner with a mortgage still has more than $300,000 in equity . . .”

Homeowners are currently sitting on a significant amount of equity. Recent data from the Census and ATTOM reveals that nearly 70% of homeowners have either fully paid off their mortgages or own at least 50% equity in their homes:

This indicates a vast majority of homeowners today have considerable equity at their disposal. Upon selling, this equity can facilitate your transition to a new home in several ways:

Become a Cash Buyer

For those who have owned their homes for a considerable period, the accumulated equity might enable you to purchase your next home in cash, eliminating the need for loans or concerns about interest rates. Investopedia suggests:

“You may want to pay cash for your home if you're shopping in a competitive housing market, or if you'd like to save money on mortgage interest. It could help you close a deal and beat out other buyers.”

Contribute a Larger Down Payment

Alternatively, you can apply your equity towards a substantial down payment on your next purchase, reducing the need to borrow heavily. The The Mortgage Reports notes:

“Borrowers who put down more money typically receive better interest rates from lenders. This is due to the fact that a larger down payment lowers the lender’s risk because the borrower has more equity in the home from the beginning.”

HECM for Purchase

Utilizing the equity in your current home can be a strategic move when considering a Home Equity Conversion Mortgage (HECM) for purchase. This innovative financial tool offered by trusted lenders like Mark Scocco with Crown Home Mortgage allows homeowners aged 62 and older to leverage the equity they’ve built up in their existing home to buy a new one without the obligation of monthly mortgage payments. Essentially, the equity from the sale of your current home can be used as a significant down payment on the new property, which is then financed through the HECM program. This approach not only facilitates the purchase of a more suitable or desirable home for your retirement years but also enhances your financial flexibility by preserving your liquid assets. It’s a powerful strategy for maximizing your housing wealth and securing a comfortable living situation that aligns with your retirement goals, all while potentially eliminating the burden of traditional mortgage payments.

Discovering Your Home Equity

To determine your current home equity, consult a trusted real estate agent for a Professional Equity Assessment Report (PEAR).

Bottom Line

Planning to move? Your home equity could be a significant asset. Connect with Countryside Homes NJ and RE/MAX Select, and let’s explore how much equity you have and how it can assist in your next home purchase.

Client Testimonials for Countryside Homes NJ

At Countryside Homes NJ and RE/MAX Select, we pride ourselves on delivering exceptional service to our clients. But don’t just take our word for it—read what our satisfied customers have to say. From first-time homebuyers to seasoned real estate investors and new home builders, our clients appreciate our dedication, expertise, and commitment to their success. Here are some of their stories.

David R. New Homeowner

Collaborating with Keith LaBrunda and Heather Montalbano from Countryside Homes NJ and RE/MAX Select streamlined the home-buying process for me. They were attentive to my needs and preferences, ensuring they understood exactly what I was seeking in a home and what was within my financial comfort zone. Keith and Heather provided invaluable assistance during the offer stage, sharing insightful details that enabled me to place a successful bid on my desired property. They recommended associates to assist me with securing a mortgage, conducting home inspections, and acquiring homeowner's insurance. Post-purchase, they continued to be a resource, suggesting local companies to contact for internet, water, waste management, oil, and other essential services. The experience of purchasing a home with Keith LaBrunda and Heather Montalbano was seamless and enjoyable.

Rachel and Andre First Time Homebuyer

As first-time homebuyers, the process of finding and purchasing a home felt daunting. But from the moment we reached out to Heather and Keith at Countryside Homes NJ and RE/MAX Select, our worries were put to rest. Their team was incredibly patient, answering all our questions and guiding us through every step. They took the time to understand our needs and preferences, ensuring that we found the perfect home in a neighborhood we love. We were especially impressed by their vast knowledge of the local market and their commitment to ensuring we got the best deal possible. We can't thank them enough for making our dream of homeownership a reality. If you're in the market for a new home, we highly recommend Heather and Keith at Countryside Homes NJ and RE/MAX Select. They truly go above and beyond for their clients!

Prestia Family New Homeowners

From the moment we began our home search, Heather at Countryside Homes NJ and RE/MAX Select stood out as the epitome of professionalism and dedication. Her team's in-depth knowledge of the Rockaway Borough area and their unwavering commitment to our needs made our home buying journey not only smooth but truly enjoyable. As new homeowners in Rockaway Borough, NJ, we can confidently say that choosing Heather at Countryside Homes NJ and RE/MAX Select was the best decision we made. Her expertise, patience, and genuine care for our family's needs transformed what could have been a stressful process into a memorable and joyous occasion. We are beyond grateful for her support and would highly recommend her and her team to anyone looking to find their dream home. Thank you for turning our dreams into reality!