4 EASY WAYS TO BUILD EQUITY IN YOUR HOME

One of the primary advantages owning has over renting is the accumulation of wealth over time. While real estate values can have up and down periods, historically home owner equity increases the longer the individual owns the home. When the home is sold, the owner receives the difference between the sales price and the outstanding loan amount less closing costs. That means the more equity grows, the more the owner will gain. Here are four ways to help build equity.

The simplest way to increase homeowner equity is to make extra payments, that widens the spread between current value and the amount owed. Loans today don�t carry prepayment penalties so there should be no concern there. You can make one lump sum payment or you can make smaller and routine extra payments each month which will increase homeowner equity.

Are there any additions to the home that will increase the value? Some additions provide a better return on investment than others but to increase value the property needs to at least be similar to other homes in the area. Updating a kitchen will appeal as will updating baths. How is the curb appeal? Is the roof in good shape? Does the home need a fresh coat of paint? These are easy ways to make your home more valuable.

You can also shorten the term of your loan. Doing so means less money to the lender in the form of interest and more toward the principal balance. For those that want to make extra payments each month but sometimes miss such a payment, refinancing from a 30 to a 15 year loan is a forced approach to more quickly pay down the loan, increasing homeowner equity.

If you�ve explored a biweekly mortgage plan, it�s another way to increase homeowner equity. However, these plans are managed by a third party and they charge a fee to do something you can do on your own. A biweekly plan means paying every other week which turns out to be 13 payments per year instead of 12. However, if you take one payment, divide it by 12 and add that amount each month, you�re accomplishing the very same on your own.

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