If you’re buying a home in Aspen or one of the surrounding communities, you’ve heard of home equity – but what is it, and how can you build it?
What is Home Equity?
Home equity is a term that refers to the current market value of your home, minus how much you owe on it.
If your home is worth $500,000 to a buyer, but you owe $400,000 to your lender, you have $100,000 in home equity.
It’s valuable because you can borrow against it if you have solid credit – and the higher your equity is, the more profit you’ll make when you sell your home.
How to Build Equity in Your Home
You can build your home equity in several ways. As long as its value is increasing, you are building equity, so:
- You can refinance into a shorter-term loan so you can pay off the balance faster.
- You can make extra payments toward your loan’s principal to reduce your overall balance.
- You can make cost-effective home improvements that boost your home’s value.
Are You Buying a Home in Aspen or the Surrounding Communities?
We’d love to help you find your dream home here. Call us at 970-429-8275 or contact us online to let us know what you’re looking for so we can start searching right away.
While you’re here you can also browse our:
- Aspen real estate listings
- Basalt real estate listings
- Carbondale real estate listings
- Snowmass real estate listings
- Woody Creek real estate listings
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