In today’s competitive real estate market, finding your dream home can feel like an uphill battle. But what if there was one simple strategy that could give you a winning edge? The hack that savvy buyers are using is: leveraging the equity in your starter home.
Here’s How It Works:
✓ **Equity** is the difference between your home’s current market value and what you still owe on your mortgage.
✓ As your home appreciates in value over time, and as you make mortgage payments, your equity grows.
Let’s say you purchased a starter home in 2022 for $365,000. By 2026, due to market appreciation, your home’s value has increased to $425,000. Assuming you’ve made consistent mortgage payments, your mortgage balance might be reduced to $275,000.
Equity Math:
$425,000 (current value) – $275,000 (mortgage balance) = $150,000 in home equity.
Using Your Equity
- Sell Your Current Home: The proceeds from the sale, minus any closing costs, will be your total equity.
- Down Payment: A significant portion of your equity can be used as a down payment on your next home.
- Closing Costs: The remaining equity can help cover closing costs associated with buying your new home, such as appraisal fees, title insurance, and attorney’s fees.
The Benefits
By strategically leveraging the equity in your starter home, you can increase your purchasing power and move closer to your forever home. This approach not only makes financial sense but also sets you on the path to achieving your homeownership dreams.
Ready to take the next step toward your dream home? Let’s connect and discuss how you can leverage your equity effectively!
Buying or Selling in Northeast Florida?
If you’re looking to buy or sell a home in Northeast Florida, you’ve come to the right place. Here at the Welch Team, we specialize in helping homeowners sell their properties and find the homes of their dreams. Contact us today to learn more!
