By: Phonicia Palmer
If you’re considering selling your home, understanding how much equity you’ve built up is essential. Your equity determines what you can afford when purchasing your next property. Thanks to the significant rise in home prices over the past few years, many homeowners have accumulated more equity than they might expect.
Here’s a closer look at the key points you should know if you’re planning to tap into your equity and invest in your next home.
Home Equity: What It Is and How to Calculate It
Home equity represents the difference between your home’s current market value and the remaining balance on your mortgage. For example, if your home is valued at $400,000 and you owe $200,000, your equity would be $200,000.
Recent statistics from the Census Bureau and ATTOM reveal that Americans currently hold substantial equity. In fact, more than two-thirds of homeowners have either paid off their mortgages entirely (as shown in green in the chart below) or possess at least 50% equity in their homes.
With today’s market, homeowners are reaping greater returns on their investments when they sell. If you have significant equity, it can be a valuable asset to help fund your next move.
Your Next Steps
If selling your home is on your mind, knowing how much equity you have is crucial. It will not only inform your sale strategy but also give you a clear idea of your potential profits. To get an accurate understanding, it’s best to work closely with a real estate agent and consult with a tax professional or financial advisor. This team of experts can provide personalized insights and guide you through the process.
Rising home prices have likely increased your home equity, too. Reach out to a local real estate agent or myself if you are in Louisiana to determine how much equity you have and proceed with confidence when selling your home.
Phonicia Palmer, Louisiana Real Estate Agent 