Why It’s Important To Get 20% Equity For Your Home

Posted by bmedia on Monday, June 1, 2020

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Stonebridge Mortgage Group Helps Portland Locals Get The Most Out Of Homeowning

Buying a home, or even owning a home, can be a complicated process. Stonebridge Mortgage Group strives to make mortgage-related issues easier to understand for our Portland clients. If you live in the Portland area and are considering either buying or refinancing a home, allow Stonebridge Mortgage Group to help. We can make sure that you understand the ins and outs of the home buying or refinancing process. We offer a variety of mortgage-related services, including loan officer services, mortgage broker services, help with commercial or residential real estate, and help with reverse mortgages.

20% Equity In Your Home Is What You Want

Regardless of whether you are just buying a home or are thinking of refinancing, Portland locals should aim to have 20% equity in their homes.

What Is Equity?

Put simply, your home equity is the percentage of the home that you own. Although you are still considered the homeowner as you pay off the rest of your mortgage, the loan company you borrowed money from has interest in your home until it is paid off. Until then, your home can be used as collateral for your loan.

How Do I Know How Much Equity I Have?

Portland homeowners can figure out how much equity they have in their home or other property by beginning with the home’s current value and then subtracting what is owed on your mortgage. For example, if you purchased a home that was worth $200,000 and paid 20% down (or $40,000), you would need a loan to cover the remaining amount – $160,000. This means you already have 20% equity in your home. You own 20%, or $40,000’s worth, of your property.

Stonebridge Mortgage Group offers the best mortgage-related services!

How To Increase Your Equity

There are a few different ways Portland homeowners can increase their equity, too. By paying more towards your loan, you increase your equity in your home. Your equity can also go up if you value or price of your home increases. This is part of why it is smart to invest in home improvements.

Starting again with a home that is originally valued at $200,000 and which a 20% downpayment has been paid towards. The homeowners still owe $160,000, which means their home equity is 20%. If the home’s value were to double to $400,000, then the homeowners would still only owe $160,000. The homeowners would then have 60% equity in their homes.

How Do I Use My Home Equity?

Having home equity is useful in many ways. It is an important asset for Portland homeowners. Portland homeowners can use their equity by taking partial or lump-sum withdrawals against it, or you can even pass on this asset to your heirs.

Some of the most common ways one’s home equity can be useful are when selling your home, when you need to borrow against your equity, or when you want to fund your retirement.

Using Equity When Selling Your Home

Most people don’t live in the same home forever. Having equity when you decide to sell your home and move is useful because you will get your home equity back from the sales proceeds.

How To Borrow Against Equity

By taking out a home equity loan, or a second mortgage, you can tap into your home equity while you still live in that home. Keep in mind, however, that this can be risky. If you fall behind your payments and can’t catch up then you could lose your home.

Funding Your Retirement

If you have a lot of equity in your home, you could make your retirement comfortable by taking out a reverse mortgage. A reverse mortgage can provide income when you’re retired, and it won’t require payments until the homeowner leaves the house.

Stonebridge Mortgage Group Offers Guidance On All Mortgage Matters

For professional assistance with mortgages and related services, look no further than Stonebridge Mortgage Group. You can rely on Stonebridge Mortgage Group to help guide you through the home buying process. We help get you pre-approved for a mortgage and help with your real estate loans and other mortgage solutions, both residential and commercial. Stonebridge Mortgage Group serves the greater Portland area and is located in Gresham, Oregon. Don’t wait to get quality assistance with buying your home!

Call Stonebridge Mortgage Group today at 503-661-5580.

 

Categories: Home Equity Loan, mortgage broker, Pre-Approval

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