According to real estate data firm CoreLogic, home values have risen more than 11 percent nationally in the past year. If you’re a homeowner, this is great news because a rise in home values means that you’re gaining more equity in your home.
So what can you do with an increase in home equity? Although the answer to that depends on how much equity you actually have, here are a few options you may want to consider:
Reinvest your equity back into your home. Remodeling your home is a great way to use your home equity. Now is an especially good time to remodel because many remodeling projects are paying off with the highest recouped resale value since 2009, according to Remodeling magazine. And since remodeling will add value to your home, you’ll be increasing your home equity even more.
Pay down or consolidate your debt. You may want to consider using some of your home equity to pay off personal debt, or at least consolidate it. Although using your home equity to pay off personal debt isn’t always the best option—and may not be widely available to all homeowners—it is something you should discuss with your mortgage professional if you feel that you can benefit from it.
Sell your home. In the end, this could be the best use of your home equity. With rising home values, you may be able to turn your built-up home equity into a profit. Many homeowners use an increase in home equity to “buy up” into a larger home. If you’re looking to sell, make sure to talk to your real estate agent now before the busy summer selling season begins.
There are a variety of ways to tap into your home equity—by refinancing or getting a home equity loan or line of credit—so be sure to talk to your mortgage professional.
For more than 25 years, Omega Financial has been serving mortgage clients in Massachusetts. Our brokers have approximately 50 years in the mortgage business. You always will receive fast, courteous, and accurate information. Omega Financial, Inc. is a company duly licensed to operate in Massachusetts as a Mortgage Brokerage. We are located in the Town of Norwood, Massachusetts where we have been operating as Omega Financial Incorporated since 1988. Licensed by the Commissioner of Banks - License No. MB2671