Four Ways Your Home Equity Can Work for You
You may have heard homeowners today have a lot of equity built up. But what does that really mean? Let’s break it down.
Because your equity isn’t just a number, it’s a powerful asset that can help you take your next big step in life.
How Much Equity Does the Typical Homeowner Have?
Here’s how it works. As you pay down your loan and home prices rise through the years, the share of your home that you own free and clear grows. That’s your equity.
And according to data from the Census and ATTOM, two-thirds of homeowners have a substantial amount of it today.
39% own their home outright without owing anything on it. And another 27% have at least 50% equity in their homes (see chart below):
That’s a big deal. And just in case you’re wondering how that translates into real dollars, Cotality says the typical homeowner has almost $300k in equity today. That’s six figures.
And whether you have that much, even more, or a bit less, here are a few examples of how you can use it.
Ways You Could Use Your Home Equity
- Move Into a Home That Better Fits Your Life Your needs change over time. Maybe your home is starting to feel cramped, or maybe you have more space than you need now that your adult children have moved out. Either way, you can use your equity as a down payment on a home that’s a better fit for what you need now, and going forward. You may even have enough equity to buy your next house in cash.
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