Home equity can be a valuable tool for homeowners to use. Let’s explore what home equity is and how you can use it to improve your financial situation.
What’s home equity?
Home equity is essentially the difference between your home's current market value and what you still owe on your mortgage. As you pay down your mortgage or as your home appreciates in value, your equity increases. It's like a savings account that grows with each mortgage payment.
How to get a proper home valuation
Ensuring an accurate valuation for your home is essential, whether you're considering selling, refinancing, or simply curious about your property's worth. Start by engaging a qualified real estate appraiser or a licensed real estate agent with expertise in your local market. They have the insights and tools to assess your home's unique features, recent comparable sales and market trends, providing you with a comprehensive valuation. For eligible Carrington customers, we’ve created a tool that lets you explore what your home can do for you called HomeAmp. HomeAmp shows your estimated home value* and provides access to opportunities that could help you achieve your future financial goals. You can find HomeAmp on your customer dashboard by logging in at CarringtonMortgage.com.
The importance of home value
Your home's value isn't just a number; it's a key player in your financial portfolio. Regularly assessing your home's value provides you with a snapshot of your overall financial health. Think of it as taking your home's financial temperature – it can guide your decisions on everything from renovations to investment strategies.
What your home’s value can unlock
Your home's equity can be tapped into through a home equity loan or cash-out refinance. These financial tools allow you to borrow against the equity you've built, providing funds for home improvements, education expenses, or even debt consolidation. The interest rates on these loans are often lower than other forms of credit, making them a cost-effective option.
A home equity loan is a mortgage or lien that is secured by a property that already has an existing loan. The amount of money you can potentially receive through a home equity loan depends on the amount of equity you have. Typically, as your home value increases, so does your home equity. A home equity loan allows you to keep the low interest rate on your existing mortgage, while still tapping into your equity.
Another way of tapping into your home’s equity is through a cash-out refinance. A cash-out refinance allows you to access the equity in your home for extra cash if you have considerable equity in the home. Some instances where a cash-out refinance may make sense are home renovations, consolidating credit card debt, or other large debts like student loans.
Your home is more than just walls and a roof. It's a dynamic asset that can evolve with you. By understanding the power of your home's equity, you're not just a homeowner; you're a financial strategist unlocking the doors to a wealth of opportunities. We’re available to help – and here's to making your home work for you!