How to build equity in your home

How to build equity in your home

August 18, 2016
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You finally bought your dream home. After months of hard work, after years of saving, you finally did it. Now you can rest. But don’t rest for too long, because you just reached another step in your life. You are a homeowner now. And, as a homeowner, you now have to build equity in your home.

It sounds like hard work, doesn’t it? I’ll be honest, it’s not easy. But it’s something you need to do. A home is not just a place where you live. It’s an investment. You have to take care of your investment, you have to make sure it grows. Trust me, you won’t regret it. Especially years later, when you decide to sell your home. Building equity will guarantee you walk away from the sale with a huge chunk of cash in your pocket instead of owing your mortgage company money.

Start by buying a house in a growing neighborhood. The location is just as important, if not more important than the home features. Although this might sound like a lot of hard work, it’s not. There are many sites on the internet that offer you a history of housing sales in different neighborhoods. Check them out and you will be able to see to see how home prices evolved in the past years.

Try pay off your mortgage faster. You can do this by making mortgage payments every two weeks instead of just once a month. It will bring more equity in your home.

Make smart upgrades. If you have some extra cash laying around, invest it in your home. And focus on the inside, rather than the outside. Kitchen and bathroom renovations last longer and they also add more value to your home. Ask your realtors for advice. They will tell you what are the best upgrades for your type of home and your neighborhood.

Don’t waste your money and time on unnecessary improvements. It might sound strange, but some improvements might actually end up bringing your home value down. So do your research before starting any project.

Thomas Hookton is a finance journalist, history buff and science fiction connoisseur. Hit him up via email.

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