If you've been a homeowner for a while, there's something important you should know about - home equity. In case you're not sure what that means, according to Freddie Mac, home equity is...

““. . . your home’s equity is the difference between how much your home is worth and how much you owe on your mortgage.””

— Freddie Mac

What this basically means is that as you keep making payments on your home loan and as home values go up, your ownership stake in your home increases. Even though home prices went down a bit last year, they've picked back up and are on the rise in a lot of places. This growth in home prices is actually great news for you.

In the most recent Equity Insights Report, Selma Hepp, who's the Chief Economist at CoreLogic, breaks it down like this:

““With price gains continuing to help homeowners build wealth, equity has reached a new high and regained losses that resulted from declines last year. And while the average U.S. homeowner gained over $20,000 in additional equity compared with the third quarter of 2022, some markets are seeing larger increases as price growth catches up.””

— Selma Hepp, Chief Economist at CoreLogic

Wow, that number is just for the past year. Let me put it into perspective for you—according to the report, the typical homeowner with a mortgage has over $300,000 in equity. Imagine the impact of having that much equity over time!

Hey, here are some examples of what you can do to make the most of your home equity.

1. Buy a Home That Fits Your Needs

If your place is feeling a little cramped, it could be a sign that it's time to start thinking about finding a bigger home. On the other hand, if you've got more space than you really need, downsizing to a smaller place might be just what you're looking for. In any case, you could use the equity you have in your current home to make a down payment on a new place that better suits your lifestyle.

2. Reinvest in Your Current Home

If you're not quite ready to make a move, you could always use the equity you've built up to spruce up your current place. Just make sure you think about how certain upgrades can impact your home's value in the long run. A real estate agent can give you awesome advice on which projects to focus on to get the best bang for your buck when you decide to sell down the road.

3. Pursue Personal Ambitions

Your home equity can actually help you make your long-held dreams come true. Whether it's starting a new business, preparing for retirement, or paying for education, it can be a game-changer. Just remember to use it wisely for things that truly matter, rather than splurging on unnecessary stuff.

4. Understand Your Options to Avoid Foreclosure

Hey there, so even though the number of foreclosure filings is lower than usual, there are still folks facing that tough situation every year. If money's tight for you, it's important to know what choices you've got. Your home's equity can kinda help out if you're struggling to keep up with your mortgage payments.

Bottom Line

If you're curious about how much equity you've built up in your home, we should definitely chat. I can arrange to have a professional equity assessment report done for you to give you a clear picture of where you stand. After that, we can discuss how you can leverage that equity to help you achieve your goals. Let me know when you're available to connect!