Are you thinking about selling your house but feeling unsure? I get it, with the housing market being a bit tight despite some improvements in affordability this year. It can be a tough decision to make. But hey, have you thought about checking out your home equity? That could give you some valuable insights and make your decision-making process a whole lot easier. According to an article I read on Bankrate, understanding your home equity could be the game-changer you need.

““Home equity is the difference between your home’s value and the amount you still owe on your mortgage. It represents the paid-off portion of your home.”

— Bankrate

“You’ll start off with a certain level of equity when you make your down payment to buy the home, then continue to build equity as you pay down your mortgage. You’ll also build equity over time as your home’s value increases.””

— Bankrate

Think of equity like a basic math problem. It's basically how much your home is worth today minus how much you still owe on your mortgage. And you know what's interesting? Your equity has likely gone up more than you realize lately.

Hey there! Over the last few years, the prices of homes have surged, which could mean that the value of your own home – and the equity you have in it – has also gone up by quite a bit. This might mean that you've got more equity tucked away than you think!

How To Make the Most of Your Home Equity Right Now

If you're considering a move, the equity you've built up in your home could come in really handy. Just check out what CoreLogic has to say...

““. . . the average U.S. homeowner with a mortgage still has more than $300,000 in equity . . .””

— CoreLogic

It's pretty clear that homeowners are sitting on a good amount of equity at the moment. According to the most recent info from the Census and ATTOM, more than two-thirds of homeowners have either paid off their mortgages entirely (highlighted in green on the chart) or have at least 50% equity in their homes (marked in blue on the chart).

That means roughly 70% have a tremendous amount of equity right now.

After you sell your house, you can actually use the money you've built up (equity) to help you buy your next home. Here's how it works:

• Be an all-cash buyer: If you've been in your current home for a while, you might have built up enough equity to purchase your next home without needing a loan. In that situation, you won't have to borrow any money or stress about mortgage rates. According to Investopedia...

“You may want to pay cash for your home if you’re shopping in a competitive housing market, or if you’d like to save money on mortgage interest. It could help you close a deal and beat out other buyers.””

— Investopedia

• Make a larger down payment: Your equity might come in handy for your next down payment. It could even cover a bigger chunk, making it easier for you to borrow less money. According to The Mortgage Reports, this is how it works.

““Borrowers who put down more money typically receive better interest rates from lenders. This is due to the fact that a larger down payment lowers the lender’s risk because the borrower has more equity in the home from the beginning.””

— The Mortgage Reports

The Easy Way To Find Out How Much Equity You Have

If you want to know how much your home is worth, just chat with a real estate agent you trust and request a Professional Equity Assessment Report (PEAR) from them.

Bottom Line

Planning to relocate? Utilizing your home equity can be quite beneficial. Let's chat to determine the amount of equity you currently have and explore how it can assist you with your upcoming home purchase or move.