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What is home equity? Think of it as the portion of your home that you truly own. That is, the value of your home not included in your current home loan. Home equity is what makes homeownership such a great investment. The opportunity to increase equity can be quite significant, making it one of your most valuable assets.
You do this by simply repaying your loan. Increasing your equity is as simple as making your monthly mortgage payments. How much increase you can expect depends on several factors, including how much of your payment goes towards principal and interest. The good news is your rate of building equity increases with every passing year of mortgage payments.
Here's a little secret — another way to boost your home equity is to do nothing! Some residential areas appreciate value faster than others. So if you live in an area with increasing property values, you can guess that yours is also going up.
Since home equity is an asset, it's part of your net worth; which means that you can withdraw from your equity should you choose to.
Here are some ideas for using your home equity, should you decide to withdraw:
There are so many ways to take advantage of this valuable asset, and we're sure you've already thought of quite a few different ways yourself.
Call Midwest Lending today. We will provide you with a free consultation, to provide you with the answers you need to make sound, financial decisions for you and your family.