Welcome to knowyourequity.com
What is Home Equity?
Imagine your home as a savings jar. Home equity is the amount in this jar. It's the portion of your home that you truly own. The more of your home loan you pay off, and the more your home's value goes up, the more money is in your jar.
HOw do you calculate your home equity?
Here's a simple formula:
Home Equity=
Current Value of Your Home−Home Loan Amount
Why is home equity important?
- Financial Security: As you grow older, having more equity in your home means having a larger financial cushion. It’s reassuring to know you have this asset to rely on.
- Borrowing Power for Needs or Emergencies: With more equity, you could qualify for loans or credit lines more easily, which can be helpful in case of unexpected expenses or for fulfilling certain dreams.
- Purchasing a new home: Your equity can assist you with the purchase of a new home whether you are moving to a new area, downsizing or ready to buy your dream home!
- Funding Retirement Plans or Healthcare Needs: Your home equity can be a crucial part of your retirement planning. It can help cover healthcare costs or other retirement expenses.
- Debt Management: If you have other debts, home equity can be a tool to manage or reduce these debts, often at a lower interest rate than credit cards or personal loans.
- Home Improvements: Using some of your home equity to maintain or improve your home can make your living space more comfortable and potentially increase its value.
What's the Current Value of My Home?
The formula provided above is only helpful with the updated value of your home. In fact, that may be the most important part in the entire formula! But where do you get the value and how?
First let's talk about what ways that will NOT give you the correct value of your home.
1. County Tax Estimate
2. Zillow Estimate
3. Word of Mouth
There is one way to get a correct evaluation of your home and that is to have a professional prepare what is called a Comparable Market Analysis. This is a report that will give you data based on your area and your home. This is a report that our team at KnowYourEquity.com can provide for you.
What will we need to prepare this report for you?
Information on the property, your address, condition. For this preliminary report we do not need to visit the interior of the home but information from you on the condition of the home is important in finding the value.
