Many homeowners looking to sell find themselves caught in a dilemma. Current mortgage rates are higher than their existing home loan, making the decision to sell and move more challenging. But what if there were a way to offset these borrowing costs? Fortunately, there is: your home’s equity.

Understanding Equity: Think of equity as a straightforward equation. According to Freddie Mac:

“Your home’s equity is the difference between its current market value and the outstanding mortgage balance.”

As you pay down your loan over time and home prices rise, your equity grows. Recent rapid home price appreciation means you likely have more equity than you realize.

The Majority Have Significant Equity: Data from the Census and ATTOM reveals that over two-thirds of homeowners either own their homes outright (shown in green on the chart) or have at least 50% equity (shown in blue on the chart). This substantial equity can be a game-changer.

Leveraging Equity for Your Move: After selling your house, this equity can ease your transition, even in a higher mortgage rate environment. As Danielle Hale, Chief Economist for Realtor.com, explains:

“Homeowners should consider their equity position. With home listing prices up 40% in the last five years, many sellers have a healthy equity cushion. This allows them to offset borrowing costs for their next home purchase.”

Practical Uses of Equity: Here are a couple of ways to utilize your equity when buying your next home:

1. All-Cash Buyer: If you’ve lived in your current home for a long time, your equity might be sufficient to purchase your next home without a loan. No need to worry about mortgage rates!
2. Larger Down Payment: Use your equity to make a substantial down payment, reducing the amount you need to borrow at today’s rates.

Taking the First Step: Assessing Your Equity: To determine your equity, gather two key pieces of information:

1. Current Mortgage Balance: Check your monthly mortgage statement.
2. Current Home Value: You can pay for an appraisal, or better yet, consult a local real estate agent for a professional equity assessment report (PEAR) at no cost.

Once you have these numbers, you’re closer to making a move—thanks to your equity.

In Summary: Connect with me a local real estate professional to explore your equity and discuss how it can facilitate your next move. 🏡📈.

Frank Rodriguez

eXp Realty

Call/Text - 832-2795157