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How Much Equity Is Hiding in Your Home?
If you have owned your home for several years, there may be something valuable hiding inside it—equity.
Many homeowners know what they paid for their home and approximately what they still owe on their mortgage. What they may not know is what their home could actually sell for in today’s market.
That difference could be significant, and understanding it may open the door to opportunities you haven't considered.
What Is Home Equity?
In simple terms, home equity is the difference between the current value of your home and the amount you still owe against it.
For example, suppose your home could sell for $450,000 and your remaining mortgage balance is $200,000. That would give you approximately $250,000 in gross equity.
Keep in mind, gross equity isn't necessarily the amount you'd walk away with after a sale. Selling expenses, mortgage payoff amounts, liens, repairs, concessions and other costs can affect your actual proceeds.
But knowing your approximate equity is a great place to start.
You May Have More Equity Than You Think
Homeowners sometimes base their idea of value on what they paid for the property years ago. But real estate markets change.
If you've owned your home for 10, 15 or 20 years, two things may have been happening at the same time: you've potentially been paying down your mortgage balance, while the market value of your property may have increased.
That's why I don't recommend simply looking at an online home-value estimate and assuming that's your answer.
Your home's condition, upgrades, location, lot, floor plan and recent comparable sales can all influence what a buyer might actually be willing to pay.
What Could Your Equity Allow You to Do?
This is where the conversation gets interesting.
Your equity isn't just a number on a piece of paper. If you decide to sell, it could potentially help you make your next move.
Perhaps you're living in the same house you needed 20 years ago—but your life has changed. The kids have moved out, you're tired of maintaining a large property, or you'd rather have something easier to care for.
Maybe it's just the opposite. You need another bedroom, a larger garage, more land or a different location.
Your equity could potentially help you:
Downsize into a home that better fits your life today.
Move up into a larger or different type of property.
Relocate to another community, city or state.
Move closer to family or the people who matter most.
Purchase another home with a substantial down payment.
Simply give yourself more financial options when planning your next chapter.
The important point is that you can't evaluate those possibilities until you know what you're working with.
"But Wes, I'm Not Ready to Sell."
That's perfectly fine.
You don't have to put a For Sale sign in your yard simply because you want to know what your home is worth.
I believe homeowners should understand the value of one of their largest assets.
We can look at recent comparable sales, current competition, your home's condition and what's happening in your particular neighborhood. From there, we can develop a realistic idea of what your property could potentially sell for.
Then we can look at your approximate mortgage balance and begin answering the bigger question:
How much equity could you actually have?
Don't Just Ask What Your Home Is Worth—Ask What It Could Make Possible
Sometimes homeowners discover that they're in a much stronger position than they thought.
That's why I like to take the conversation one step beyond, "What's my house worth?"
The better question may be:
"What could the equity in my home allow me to do next?"
If you haven't looked at your home's value recently, let's find out.
There is no obligation to sell and no pressure to make a move. Sometimes having accurate information is simply the first step toward making a good decision.
Let's Find Out How Much Equity May Be Hiding in Your Home
Wes Stolsek, REALTOR®
OMNI Homes International
520-404-9773
Whether you're thinking about selling now, sometime in the future, or you're simply curious about your home's current market value, give me a call. Let's find out what your home may be worth—and what that equity could make possible for you.
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