Sometimes you forget and don’t realize your home provides so much to your life. It brings along with it your dreams of the future, shelter to you and your family, a way to provide a better lifestyle, a better commute, a neighborhood, schools, community involvement and recreational facilities. But it also provides a way to save for the future. It does this by allowing you to build your home equity, which is the difference between your home’s market value and what you owe on it. Each time you make a mortgage payment you increase your equity. How beautiful is this. It’s forcing you to save for the future. And should home prices rise, your equity grows faster as your home’s value increases.

The building up of home equity is an exceptional feeling of satisfaction and accomplishment.  Tapping into Equity is also a great resource for home improvements which even adds more value to the home. Consider an equity line of credit or home equity loan. The secret here is moderation, you need to keep your financial picture and life in balance by responsibly paying off debt, saving for retirement and being ready for any emergency. If using equity for home improvement, which is still tax deductible under the 2018 the new Tax Laws, there are some home improvements that provide a better return on investment than others. Article to Follow

If you are thinking of growing your homes equity even faster and at warp speed you’ve got two main tools to use: You can increase the home’s value or reduce the mortgage debt. Or do both.

Sign Up for Westfield Newsletter
Our newsletter delivers the local news that you can trust.

Here are a few tips to help build your home equity:

  • Make your down payment a substantial one.

 This is instant equity with a large down payment you get the equity right from the beginning.  If you put down at least 20% or more of the property’s value for a bonus: You will avoid that expensive private mortgage insurance that never goes away on the existing mortgage unless you refinance down the road.

  • How about   a 15-year mortgage if you qualify for one.

Taking out a 15-year mortgage or refinancing into one from a 30-year loan, piles on the equity. You’ll save plenty on the total interest and more money is applied to the principal because you pay the interest on the loan for less time. But remember: Your monthly payments are higher with a 15-year home loan. See if refinancing makes sense for you. Whether it’s a 15 year or a 30 year  there are many loan programs available . Contact Brian DiVito VP Guaranteed Rate cell 908- 451-4517

  • Improve the property

Some remodeling and improvement projects boost a home’s equity. But not all. of them do. The average rate of return on most common upgrades range from 72% to 93%, according to some remodeling research. And that’s if the home sells within a year. Smaller projects — adding attic insulation, replacing a garage door or front entry door — do better at increasing equity but these projects should be paid by check instead of loan.    (Adding value to your home to follow)

  • Pay more on your mortgage earmark to principle

Paying more is a great option. Just make sure the extra money is applied to your mortgage principal. Ask your mortgage servicer (you can find the phone number on your monthly statement) how to do it and watch your monthly statements to be sure the money is credited correctly. Here are a few ways to pay more regularly:

  • Add an extra sum to your monthly payment. Pick an amount big enough to make a difference but not so big that it effects your budget. For instance, if your payment is $983, round up to $1,100, and then increase the amount when you’re able.
  • Another option is to of add to your monthly payment: increase the payment by an amount that is equal to a twelfth of a payment. By the year’s end, you’ll have made an extra payment.
  • Another option is to modify to a biweekly mortgage payment. Paying every two weeks instead of   once a month adds one extra monthly payment to your mortgage annually.
  • Schedule extra payments automatically from your bank to your mortgage account on regular intervals
  •  Use Your bonuses, any monetary gifts or windfalls.

If you don’t want the monthly commitment that comes with a 15-year mortgage or increasing the size of your payment, or scheduled payments to principle or using one person’s income then look for cash that in here comes your way here and there. Maybe a holiday or birthday or that bonus or overtime pay can be decimated to applying to the mortgage. Even convert gift cards to cash and add it to your mortgage   building your equity. If you are fortunate enough to inherit money, use part of it to pay down the mortgage. Your mortgage servicer can tell you how to apply smalls increments or that big windfall to your equity. Again, just make sure the money goes toward the principal, not interest.

  • Decide if one partner’s salary will go directly to the mortgage.

Couples who want to increase equity in a hurry sometimes decide to live on one salary while using the other persons paychecks are earmarked for paying down the mortgage.

Sometimes this belt-tightening can be demanding so review all your expenses and also add for any emergency  the rewards will be well worth it .  My Best to You, Susan.