You home is likely to be the biggest asset you will possess, which is why building equity in your property is so important. Representing the difference between what your home is worth and what you owe on the mortgage, your home equity will usually rise with time.
To help build strong equity in your property, we have compiled some tips for you to follow.
- Make a big down payment
If you want to build as much equity in your property as possible in a short amount of time, then you can choose to make a large down payment. It’s important to assess all of your financial goals and needs before making this big decision, but if you have the means and desire to put down 21% instead of 20% on your home loan, then this avenue may be worth taking.
- Work on paying off your mortgage
This tip may seem obvious, but if you focus on paying off your mortgage little by little, over time your home equity will rise. To find out by how much, it’s worth calculating the percentage of your mortgage repayments going to interest, and how much is actually going towards the principal. The more going to the principal, the better your equity will be.
- Add home improvements
Making improvements to your home will help you raise its overall property value. You don’t need to break the bank by renovating whole sections of the property; the small efforts make a big difference too. If you want to bring new life into your interior, consider updating your lighting fixtures or repainting feature walls. You can also add some curb appeal by planting flowers, creating a neat grass area, or even installing shutters. The bones of a home matter, but first impressions count as well when it comes time to sell.
- Rent your home out
Getting renters into your home is a great way to take some financial stress out of your life. Renting your house to tenants essentially means they will be paying your mortgage, while you retain the title to the property. This is a big decision, but if you plan ahead, find responsible tenants and understand what the role of a landlord entails, it may be a great way to help build your home’s equity at an increased pace.
Get expert advice about home equity