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How to increase home equity

Today we discover the easiest ways to increase home equity.

Learn how to take some simple steps for any homeowner and increase the equity in there home. Just to define equity from the outset, it is the difference between the value of the home and the amount of debt.

Most property owners long for the moment when they pay off their mortgage and own their home free of debt. While this may remain a long way off for some a realistic goal is to build equity in your home along the way.

Ways to increase home equity

The Easiest ways to increase Home Equity

The easiest steps to take if you want to increase home equity is to clear as many debts as you can. In effect the only debt you should have is the mortgage itself.

Be slective when you spend mony on the home. Not all money spent on a house will reflect in its value to a seller. Sometimes the only value is widening the catchment opportunity, this has value in its own rights but extensions and extra footage on the ground floor, an extra bedroom in the attic will increase equity more so than a new boiler and underfloor heating.

Try to minimise the mortgage loan to as few years as you can manage. most seem to default to around 25 years loan. Even though the payments will be higher on a 20 year loan, the equity will build up faster as the loan is paid off more quickly.

Dont save in a separate account, overpay!. As you overpay your mortgage, your equity increases and payments decrease. In effect you pay less on your mortgage each month, giving you more money to over pay. Simply avoid using the extra cash, until your mortgage is paid off, you don’t really have such a luxury. Try and see the bigger picture if you can and you’ll find the short term sacrifice provides long term benefits.

Finally you may need to be patinet if your home value has decreased. Within time it will increase again.

We hope these simple steps will help you reduce the only debt worth having in the UK and you’ll soon see your equity build no matter what the market brings in the coming months.

posted by Zane in Buying,Guide,Home,Lending,Mortgage,Recession and have No Comments

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