Unlocking Home Equity: How Homeowners Can Access Their Growing Investment
Home Equity - the difference between a home's market value and the mortgage balance, is something that can be a bit of a mystery to homeowners. How is it figured? What can I use it for? And most importantly, how can I access it?
To determine equity, one needs two figures - the current market value and the mortgage balance. The latter can be determined by logging into your lender's website and looking up the balance or reviewing a current statement. The home's market value can either be determined via a comparative market analysis (from me) or an appraisal (if you are cashing out some equity from a lender, an appraisal will likely be required).
Although technically home equity is yours to do with as you like, in order for the interest to be tax deductible, equity must be used to buy, build, or improve a home. Remodel projects or additions such as ADU/DADU rental units may improve your quality of life, add more equity, and produce income.
In order for the interest to be tax deductible, equity must be used to buy, build, or improve a home.
There are three ways equity can be accessed:
Home Equity Line of Credit - allows you to use some or all of your equity in a line of credit which you can use as you need. ** Be sure to set up your HELOC before you need it. You only pay interest on what you use.
Cash-Out Refinance - this requires refinancing a mortgage in order to access the equity
Sell - when you sell, you can use that equity for your next house or whatever your heart desires!
Thinking about tapping into your home's equity? Let's talk about your strategy!
Questions or comments? Reach out to me. I look forward to talking with you!
Jennifer Suemnicht, Broker/Realtor
Compass - 837 N 34th Street, Suite 100, Seattle, WA 98103
Call/Text: 206-550-1676
Email: Jen@JenSueHomes.com
Web: www.JenSueHomes.com
