A home is an investment and therefore is something you want to keep improving to increase its value. In this blog post, we’ll go through some ways that you can increase the equity in your home.
Increase Your Down Payment
If you are still in the process of purchasing your home, you will be able to immediately increase the equity in your home by simply increasing your down payment. In fact, if you put at least 20% down on your home, you won’t have to pay for private mortgage insurance (PMI). PMI is an insurance policy that protects lenders in the event that a borrower defaults on their loan. You typically pay this cost yourself until you have at least 20% of your home paid down. However, if you pay enough on your down payment, you will waive PMI entirely. Instead of pocketing that money, you can pay that additional would-be cost toward your mortgage and give yourself even more equity.
Make Additional Mortgage Payments
If you can’t increase the size of your down payment, consider increasing the size of your monthly mortgage payment. Even if the sum seems insignificant to you, it may significantly impact down the line. If you can, make additional mortgage payments, and you’ll be able to pay off your home even faster. This is because any additional payments that you make toward your mortgage go directly toward the principal of your loan as opposed to the interest. This ultimately means that you’ll be closer to the end of your loan.
Refinance & Shorten Your Mortgage Term
Refinancing can be a great option to put more money into the equity of your home. This is because a shorter term can give you lower interest rates, and a higher proportion of your monthly mortgage payment will go straight toward your principal. Any money that goes toward your principal is equity that you have in your home. That said, not everyone will benefit from a refinance, so make sure that you speak to a broker to get a better understanding of whether it would be the right choice for you.
Invest in Home Improvement
Sometimes small home improvement projects can drive up the value of the home. Driving up the value of your home means that you will have a home that is worth more than what you paid for, which is a great sign of a smart investment. You may even find that you do not need to hire a professional to take care of certain things in your home if you have had previous experience with them. Even if you do decide to hire a professional, the cost of the improvement may end up valuing the house even higher than what you spent on it.
Mortgage Broker in Washington DC
If you are looking for a mortgage broker in Washington DC that will work with you to ensure that your needs are met, Gregg Busch is the perfect option for you. With experience and expertise, Gregg Busch guides you through the purchasing and refinancing process so you see the solutions you want. If you are interested in learning more about our services, please contact us today.