Home equity is the difference between what your home can sell for and what you owe on it. You can calculate your equity by subtracting the amount still owed on the mortgage loan(s) from the market value of your property.
Generally, the longer you own your home, the more equity you build. If you can’t make the payments, you can lose your home. This is why you have to use your home equity in smart ways.
- Remodel your home. If you’ve wanted to add on a family room or modernize your kitchen, consider using your home’s equity to fund the project. Home improvements usually increase your home’s marketability and value.
- Make major repairs where need be. Your home’s equity can be a funding source for major repairs like plumbing problems and re-roofs.