How Home Equity May Help You Buy Your Next Home in Cash
Andrea Ballesteros December 27, 2024
Andrea Ballesteros December 27, 2024
Building equity in your home is one of the greatest financial benefits of homeownership. Right now, homeowners across the country are sitting on record amounts of equity, and this could be a game-changer for your future plans. If you’ve been asking yourself, “Why would I move right now?” it’s time to flip the script to, “Why wouldn’t I?” Here’s why:
Home equity is the difference between the current market value of your home and the balance remaining on your mortgage. For example, if your home is worth $400,000 and you owe $200,000 on your mortgage, your equity is $200,000. This equity represents real, tangible wealth that you can leverage to achieve your financial goals.
Recent data from the Census Bureau and ATTOM shows that homeowners have accumulated unprecedented levels of equity. Over two-thirds of homeowners have either completely paid off their mortgages or have at least 50% equity in their homes. To put it into perspective, CoreLogic reports that the average homeowner has $311,000 in equity.
This kind of wealth opens up a world of possibilities, especially if you’re thinking about selling your home. Imagine being able to:
Buy Your Next Home in Cash: With equity like this, many homeowners are joining the growing ranks of all-cash buyers. According to the National Association of Realtors (NAR), 26% of buyers in a recent report purchased their homes without a mortgage. Buying in cash means no monthly payments, no interest rates, and fewer contingencies in the buying process.
Make a Larger Down Payment: Even if you’re not in a position to buy in cash, your equity can enable a significant down payment on your next home. This can lower your monthly payments and reduce the amount you pay in interest over the life of the loan.
The first step to determining how much equity you have is to connect with a real estate professional for a Professional Equity Assessment Report (PEAR). This report will give you a clear picture of your home’s current value and how much wealth you’ve built up.
With this information, you can explore options for your next move, whether that’s upgrading to a larger home, downsizing to something that better fits your lifestyle, or relocating to your dream destination.
Today’s homeowners are in an enviable position, with record levels of equity providing unprecedented opportunities. Whether you’re ready to buy your next home outright or simply make a more financially advantageous move, your equity is the key to unlocking those possibilities.
If you’re curious about how much equity you’ve built and how it can fuel your next move, let’s connect. Together, we can assess your options and create a plan to make your real estate goals a reality.
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