If you are a homeowner then you should make building equity in your home one of your number one priorities. The reason for this is that equity in your home is like having cash in your bank account because you are able to borrow against it for a variety of different purposes. Also, when you build equity in your home it means you are that many dollars closer to owning your home outright. There are quite a few things you can do in order to build equity in your home that include making a higher down payment, additional principal payments, shorter mortgage, as well as focusing on home improvements.
Making a large down payment helps you build equity in your home because every dollar you pay in your down payment goes directly to your equity. Because of this, saving money in order to make large down payments has several benefits. First, it automatically increases your equity as means that you will require a lower loan amount which means you will pay less money in interest. So, if there is any way you can make a large down payment make every effort to do so.
Another way to build equity in your home it makes more payments on principal than is required. This is important because every dollar paid on principal means another dollar built in equity and less money that will accrue interest. So, even if you can only make small extra payments on principal now still go ahead and get in the practice of doing so. It will really pay off in the long run.
Also, sacrifice in the short run and have a short mortgage term rather than a long one. By doing this you do several things. First, you pay more money per month on your loan, but you will have less money accrued in interest and build equity significantly faster. Also, if you have a short loan period you will save a considerable amount of money that would be accrued in interest otherwise and the peace of mind of knowing that you own your home much faster.
Investing in home improvements is another way you can build your equity. The reason this builds equity is because when you make home improvements you increase the value of your home, which means you will be able to build more equity. However, there are some things to keep in mind when considering home improvements. For example, home improvements to kitchens and bathrooms always increase the value of your home more so than external improvements like swimming pools or fences.
If you are interested in building home equity then make a plan that includes the following tips and make sure you follow it diligently. By doing this you will build equity in your home quickly and efficiently.
Got a Question? Ask.
Ask the community a question about this article:
Frequently Asked Questions
Best place to invest for my grands to have money ...
By: egray03 | 17-10-2008
Best place to invest for my grands to have money sent on their birthdays even when I may be gone
I have average credit. around 650. I make about ...
By: kevin | 17-10-2008
I have average credit. around 650. I make about 100K annual salary. How much of a mortgage will a bank give me approx. What % will I need as a down payment?
Municipal Bonds
By: ssfishfoot | 17-10-2008
How do I determine current financial status of an already owned Municpal Bond?
Capital Gains tax liability
By: Tony | 17-10-2008
"Capital Gains" tax liability-If you receive 1/2 ownership (buy out) in a house left by your parents to you and your sibling, and the house has been owned by them for over 50 years, does the base price of the house go up dollar for dollar for every dollar that you and your sibling have put into it in improvements, to reduce capital gains? Thanks all
Prisoner of Dept
By: Prisoner of Debt | 16-10-2008
Dear Lita,
I am a joint signer on a home loan and as you may have guessed a victim of the subprime loan fiasco. I am more than a year behind on my mortgage due to an external company researching the validity of my initial loan and not being able to make the payments. Consequently, I may be facing foreclure in a few months down the line.
I am currently in graduate school and are taking out loans to finance my education. Since I am expecting to graduate in May 2008, repayments will begin 6 months after my graduation date. I also took out a home improvement loan when we first bought the house, so I have dept there as well. I don't have any credit cards and I only buy my items with cash. Given that I must owe over $400,000 (including my mortage) and not being able to get a new mortage (or get rid of the house), I am knee deep in dept and my credit score is in the low 600's. What can I do to get myself out of this disasterous debt. Please help SOS (Save our Souls), POD (Prisoner of Debt)!!!!!!!
Thank you,
Prisoner of Debt
Help! Keep my home.
By: betty | 16-10-2008
Simple question but, Hard answer. Help I'm about to lose my house. My husband and I work very hard middle class people. Due to the economy we cant seem to get anywhere??
Q&A Powered by:
More from Robert Michael
High Speed Broadband And Why You Need It.
By: Robert Michael | 17/03/2007 | Internet
Exploring everything about the world today is much easier to do through the help of the Internet. Through it, you can find bulk of information of anything under the sun. The inventor of Internet is amazing and indeed a genius. Before, getting a series of information about a particular topic...
Why Sprint Wirless Broadband Is Making Big Headlines
By: Robert Michael | 09/03/2007 | Internet
Sprint Wireless made a headline in one of the famous newspapers in the United States for providing credit to their business clients for break in its network all over the country. The said break was described as quick busy signals, dropped calls and other slight trouble. However, compared to its...
Getting Broadband Connected In And Going Wireless With VoIP
By: Robert Michael | 07/03/2007 | Internet
Here are ten easy steps for going wireless with VoIP.
You will need an updated computer.
First you will need to have an upgraded computer that is compatible with VoIP software. When you are comparing and choosing service providers, take special note to see if they run their programs on Windows, Linux,...
The Basics On How To Choosing Your First Home
By: Robert Michael | 27/02/2007 | Real Estate
If you are ready to move out of your apartment, there is no time better than now. Beginning to search for your first home is an important step to having the ability to build better finances and to live in a place that is comfortable. If you are considering a...
UK Broadband Speed Factors And Comparisons
By: Robert Michael | 17/01/2007 | Internet
UK broadband speed varies widely across the country. The differences are based upon the location, type of broadband and the service providers, themselves.
Speed is based upon connection, download and upload of information. Speed also varies based upon individual factors. All the factors come together to help give a rough estimate...
Common Issues With Uk Broadband Service
By: Robert Michael | 14/01/2007 | Internet
There are many variables to an internet connection. When a person first gets hooked up to a broadband connection they may have many questions and problems.
This is common and most of these worries are quite simple to solve or are really not a concern at all. ...
How To Properly Use A Uk Broadband Test
By: Robert Michael | 11/01/2007 | Internet
A person can find a UK broadband test very easily on the internet.
The key to using these tests efficiently is to understand how they work and how to interrupt the results. These tests can be very helpful for a person who has had internet connection or speed...
Satellite UK Broadband May Be A Good Broadband Choice For Some
By: Robert Michael | 08/01/2007 | Internet
Satellite UK broadband is the broadband answer for those living in the remote or outlying areas of the UK. Before satellite a person was out of luck if they were not close to cable service or a telephone line.
Now, though, with satellite UK broadband almost everyone in the UK has...
Self Improvement 
