Understanding how much equity you have is the first step in figuring out what you can afford when you move. And since housing prices has increased so much in recent years that most people have a lot more equity than they themselves imagine.
Here’s a deeper dive into what you need to know if you’re ready to leverage your investment and put your equity toward your next home.
Home Equity: What Is It and How Much Do You Have?
Home equity is the difference between the actual value of your home and the amount you still owe on your mortgage. For example, if your home is worth $400,000 and you only owe $200,000 on your mortgage, your equity would be $200,000.
Recent data from the Census and ATOM shows that Americans have significant wealth right now. In fact, more than two out of three homeowners have fully paid off their mortgages (is shown in green in the following graph) or have at least 50% equity in their homes (is shown in blue in the following graph):
Nowadays, more homeowners are receiving a higher return on their homeownership investments when they sell, and if you have that much equity, it can be a powerful force in driving your next move.
What you should do next
If you are thinking about selling your home, it is important to know how much equity you have, as well as what that means for the sale of your home and your potential profits. The best way to get a clear picture is to work with your agent, while also speaking with a tax professional or financial advisor. A team of experts can help you understand your specific situation and guide you forward.
Home prices have gone up, which means your equity probably has too, so you can know how much you have in your home and move forward with confidence when selling.
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