In the last year, homeowners across the nation have gained an average of $60,000 in home equity. What does that mean for you? Today on My Greenville Home Radio, Dan breaks down three ways you can leverage your newfound equity, plus provides an updated look at the local real estate market in light of these developments.
How do homeowners gain equity?
Homeowners have gained a considerable amount of equity over the last few years due to increasing home value. Homeowners typically gain equity one of two ways. First, you build equity by paying down your principal mortgage payment every month. Principal payments, unlike interest payments, knock down your actual loan amount and build homeowner equity. A second way to build equity is for your home to appreciate, which we have seen happen very quickly the last year.
How much equity have homeowners gained in the last year?
The average homeowner in the United States gained about $60,000 in equity in the last year according to a Core Logic study on the topic. South Carolina homeowners gained an average of $61,000. What does that mean for us? That means your home is serving you well!
How can homeowners leverage their newfound equity?
There are a couple things you can do with this equity. The first is cash out through a refinance. While this is a great option for investors, Dan does not recommend refinancing your personal home, especially if you purchased during the period of time when interest rates were in the 3% range. If you have a 3% interest rate, sit on it! Another way to use your new equity is to let it fuel your next move. This money can be used as a down payment on your next home or investment property providing you with additional income and a bigger asset! Finally, you can leverage your equity with something called a home equity line of credit (HELOC). A HELOC is a loan whose collateral is the equity you have in your home. This money is sitting ready to be used, but you aren’t charged until you use it! Having a quick source of cash with an oncoming recession is always a good idea.
How does increased home equity impact the Upstate real estate market?
To learn more about how these national market statistics and advice apply to our local market, listen to this entire episode of My Greenville Home:
Dan Hamilton is the founder of Hamilton & Co. and the lead listing agent for the team. He is the only agent in the Upstate endorsed by Shark Tank star and real estate mogul Barbara Corcoran. Additionally, Dan hosts a weekly radio show on The Answer 94.5 and 106.3 WORD giving tips and advice on real estate and is a frequent contributor for real estate on Your Carolina TV show on WSPA Channel 7. Visit mygreenvillehome.com to learn how Dan can help you sell your home.