Many homeowners looking to sell feel like they’re stuck between a rock and a hard place right now. Today’s mortgage rates are higher than the one they currently have on their home, and that’s making it harder to want to sell and make a move. 

But what if there were a way to offset these higher borrowing costs? There is! And the money you need probably already exists in your current home in the form of equity.

What Is Equity?

Think of equity as a simple math equation:  How much your home is worth minus what you own on your mortgage. 

Your equity grows as you pay down your mortgage over time and as home prices climb. And thanks to the rapid home price appreciation we saw in recent years, you probably have a whole lot more equity than you realize.

The latest data from the Census and ATTOM shows more than two out of three homeowners have either completely paid off their mortgages or have at least 50% equity. That means the majority of homeowners have a game-changing amount of equity right now.

How Can Your Equity Help Fuel Your Move?

After you sell your house, that equity can help you move without worrying as much about today’s mortgage rates. As Danielle Hale, Chief Economist for Realtor.com says:

“A consideration today’s homeowners should review is what their home equity picture looks like. With the typical home listing price up 40% from just five years ago, many home sellers are sitting on a healthy equity cushion. This means they are likely to walk away from a home sale with proceeds that they can use to offset the amount of borrowing needed for their next home purchase.”

To give you some examples, here are a few ways you can use equity to buy your next home:

• Be an all-cash buyer: If you’ve been living in your current home for a long time, you might have enough equity to buy your next home without having to take out a loan. If that’s the case, you won’t need to borrow any money or worry about mortgage rates. 
• Make a larger down payment: Your equity could also be used toward your next down payment. It might even be enough to let you put a larger amount down, so you won’t have to borrow as much at today’s rates. 

How do I determine how much equity I have in my home?

To do that, you’ll need two things:

• The current mortgage balance on your home
• The current value of your home

You can probably find the mortgage balance on your monthly mortgage statement or speaking with your mortgage servicer. 

To understand the current market value of your house, you can have an appraisal completed. This will cost approximately $500. Or you can rely on your Realtor® to conduct an analysis of value for you, free of charge.

Once we have established the fair market value of your home, you’re one step closer to making a move you may not have considered – all thanks to your equity!

Katy’s Bottom Line

If you want to find out how much equity you have and talk more about how it can make your next move possible, LET’S CONNECT!