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Your increased home equity will help you make the most of your next home purchase.


 

Building equity in your home is one of the greatest financial benefits of homeownership. Homeowners across the country currently have more equity than ever before.

Let’s take a look at how this equity can change your situation and why your perspective can change from “Why should I move now?” to “Why not?”


What is home equity? Home equity is the difference between the value of your home and the amount you still owe on your mortgage. For example, if your home is worth $400,000 and you only owe $200,000 on your mortgage, you have $200,000 in equity.


Why is equity important to homeowners looking to sell? Recent census and ATTOM data show just how important home equity is today. In fact, two out of three homeowners have either fully paid off their mortgage (shown in green in the chart below) or have at least 50% equity in their home (shown in blue in the chart below):



This is a very important fact. With two out of three homeowners having at least 50% equity in their home, that means the average homeowner has built up $311,000 in equity, according to CoreLogic. That kind of net worth can be a huge help when you’re considering a move.

And that’s why the percentage of all-cash buyers has recently reached a new high. According to the National Association of Realtors (NAR)’s annual report, 26% of buyers were able to purchase a home without a mortgage (see graph below):



Imagine the opportunity to buy your next home with cash. No mortgage. No monthly payments. No interest rate worries. If you want to find out how much equity you have, contact your real estate agent and ask for a Professional Equity Appraisal Report (PEAR). You may find enough equity to buy your next home outright. Or, given today’s mortgage rates, buying a home without a mortgage is a real deal. Even if you don’t have a lot of equity, you may have enough to make a larger down payment, which has its own benefits. In conclusion, today’s homeowners have a tremendous amount of equity, which is why the percentage of all-cash buyers is on the rise. If you would like more information, I encourage you to contact a qualified agent in your area and speak with them.



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