Friday, July 23, 2010

Fantastic Home Equity

Fantastic Home Equity
You never know what life will throw at you. Home equity is a significant advantage to purchasing a home and a great financial resource to have. Your home provides you with financial opportunities not many lenders can provide. Homeowners can borrow against their home's equity to pay for home repairs and renovations, school tuition, costly medical expenses, and even pay off debt.

Home equity is money in the bank. What is the Value of Home Equity? So, you can build home equity from an increase in the potential sale price of a home and from paying down the mortgage debt that you owe on your home. As the principal of the mortgage amount decreases as a result of monthly mortgage payments, the home equity increases – even if the home doesn't increase in value. Home equity is the difference between the current value of a home and the amount still owed on the mortgage.

When you purchase a home and make payments on your home mortgage, you start building what is called home equity. But the resale value, or even the appraised value before a sale, of your home is not the only value your home contains. If and when the time comes to sell, hopefully you'll find that you can get more money for your home than what you originally paid for it; yielding you a profit. As the years progress, the value of your home could increase.

It's an investment that, over time, could yield a significant increase in value. rchasing a home is a huge life event.

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