When you enter the property market or transition from your first home to another property, it’s important to pay attention to the value of your house, townhouse, or apartment.
The equity in your home is the difference between the current value of the property and what you still owe on your home loan. Ideally, property owners want the equity to be well and truly on the positive side. There are enormous benefits both short and long term if the equity in your property grows.
If you bought your home for $600,000 and still owe $200,000 on the home loan, the equity is calculated as the difference between these two figures and amounts to $400,000.
You may be able to borrow up to 80% of the equity in your home, subject to serviceability. The home equity could be used to purchase an investment property, renovations, debt consolidation or could even enable you to purchase a new car or fund an overseas holiday.
Talk to a mortgage broker about how you can use the equity in your home to your advantage.
A broker will also advise on ways to build up the equity in your property through additional payments on your home loan or linking it to an offset account. Instead of being paid interest on your offset account, the amount of interest you pay on your loan is reduced. This can help you pay your home off faster and increase equity.
Other ways to increase equity will include renovations to the home such as internal and external painting, landscaping, bathroom, or kitchen renovations, adding a swimming pool or improving security with cameras or window screens.
Your home is the most important investment you will make, so it’s important to stay on top of the value of your property and what building equity in the home can deliver for you.
Get in touch today and let us work out the equity in your home and ways that you can use it.