Featured Image

Understanding Home Equity: A Guide from Customer First Financing

Introduction: Home equity can be a powerful financial tool for homeowners, providing opportunities for refinancing, debt consolidation, or funding significant expenses. At Customer First Financing, we believe understanding your home equity is an essential part of effective financial management. This blog post will guide you through the process of determining if you have equity in your home and how to leverage it to meet your financial goals.

Understanding Home Equity: Home equity is the portion of your property that you truly ‘own’. It’s calculated by taking the current market value of your home and subtracting any outstanding mortgage or loan amounts. If the number is positive, that’s your home equity. If it’s negative, you have no equity and are considered ‘underwater’ on your mortgage.

Determining Your Home Equity:

  1. Determine your home’s current market value: The first step to figuring out if you have home equity is to find out how much your home is worth currently. This can be done by hiring a professional appraiser, using online home value estimators, or comparing similar properties in your neighborhood.
  2. Find out how much you owe on your mortgage: Your mortgage statement should provide you with the outstanding balance on your loan. If it doesn’t, you can contact your mortgage lender to find out.
  3. Subtract your outstanding mortgage balance from your home’s current market value: The difference is your home equity. For example, if your home is worth $300,000 and you owe $200,000 on your mortgage, you have $100,000 in home equity.

Tips for Increasing Home Equity:

  1. Make regular mortgage payments: This helps reduce your outstanding mortgage balance, thus increasing your equity over time.
  2. Home improvements: Making improvements can increase your home’s value, thereby increasing your equity.
  3. Wait for home values to rise: If property values in your area increase, your home’s value and therefore your equity will likely increase as well.

How Customer First Financing Can Help: At Customer First Financing, our team of financial experts is committed to helping you understand and manage your home equity effectively. We can guide you through the process of determining your home equity and provide advice on how to increase it.

Understanding your home equity and knowing how to leverage it can be pivotal to your financial strategy. At Customer First Financing, we are here to help you navigate this process and find the right solutions for your financial needs. Contact us today to learn more about our services and how we can assist you.

Jul 3rd, 2023