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What Every Homeowner Should Know About Their Equity
Curious about selling your home? Understanding how much equity you have is the first step to unlocking what you can afford when you move. And since home prices have risen so much over the past few years, most people have much more equity than they may realize.
Here’s a deeper look at what you need to know if you’re ready to cash in on your investment and put your equity toward your next home.
Home Equity: What Is It and How Much Do You Have?
Home equity is the difference between how much your house is worth and how much you still owe on your mortgage. For example, if your house is worth $400,000 and you only owe $200,000 on your mortgage, your equity would be $200,000.
Recent data from the Census and ATTOM shows Americans have significant equity right now. In fact, more than two out of three homeowners have either completely paid off their mortgages (shown in green in the chart below) or have at least 50% equity in their homes (shown in blue in the chart below):
Today, more homeowners are getting a larger return on their homeownership investments when they sell. And if you have that much equity, it can be a powerful force to fuel your next move.
What You Should Do Next
If you’re thinking about selling your house, it’s important to know how much equity you have, as well as what that means for your home sale and your potential earnings. The best way to get a clear picture is to work with your agent, while also talking to a tax professional or financial advisor. A team of experts can help you understand your specific situation and guide you forward.
Bottom Line
Home prices have gone up, which means your equity probably has too. Connect with a licensed mortgage professional to learn more about how much you have in your home and move forward confidently when you sell.
Curious to see what your loan payment could look like? Try our interactive mortgage calculator below:
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