What Every Homeowner Should Know About Their Equity

What Every Homeowner Should Know About Their Equity

Thinking about selling your home? The first step is understanding how much equity you have, which can greatly impact what you can afford when you move. With home prices having risen significantly in recent years, many homeowners have more equity than they might realize.

Here's a closer look at what you need to know if you're ready to cash in on your investment and use your equity for your next home purchase.

Home Equity: What Is It and How Much Do You Have?

Home equity is calculated by subtracting the remaining balance on your mortgage from the current market value of your home. For instance, if your home is worth $400,000 and you owe $200,000 on your mortgage, your equity is $200,000.

According to recent data from the Census and ATTOM, many Americans currently have substantial home equity. In fact, over two-thirds of homeowners have either fully paid off their mortgages (indicated in green in the chart below) or have at least 50% equity in their homes (indicated in blue in the chart below).

Today, more homeowners are seeing a significant return on their investments when they sell. If you have substantial equity, it can be a powerful tool to help you make your next move.

What You Should Do Next

If you're considering selling your house, it's crucial to understand how much equity you have and how it can impact your sale and potential earnings. The best way to get a clear picture is by working with your real estate agent and consulting with a tax professional or financial advisor. This team of experts can provide a comprehensive understanding of your situation and guide you through the process.

Bottom Line

As home prices have risen, your equity has likely increased as well. Let's connect so we can determine how much equity you have and help you move forward confidently when you decide to sell.