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If you’re a newer homeowner, odds are you don’t really “own” your home outright. Rather, you likely have equity in your home.

In this article, we’re going to talk about what home equity is, how to use it to your advantage, and things you should avoid using your home equity toward.

 What is home equity?

Unless you’re one of the lucky few who paid for their homes in cash, you probably took out a mortgage. As you pay off that mortgage you build equity.

Home equity is essentially the value of a property that a homeowner has at their disposal due to paying back part or all of their mortgage.

However, there’s another factor at play in home equity, and that’s market value.

Since the housing market fluctuates, the value of your home does as well, and as a result, your home equity changes with the market value of a house. That might sound worrying, but the good news is that due to something called appreciation.

In the same way that the cost of living tends to rise each year with inflation, so do housing prices. However, appreciation isn’t the only factor at play in the valuation of your house. As your home ages, it will likely need some renovations, which could decrease the home value.

Generally speaking, however, your equity achieves a net gain as you pay your mortgage and the value appreciates.

Increasing equity

Now that we know why equity can be so beneficial as an asset, let’s talk about ways to build it.

The best way to build home equity is to repay your home loan. However, more than simply repaying, you’ll want to repay in the fewest number of years to avoid paying more in interest. The longer you take to pay your mortgage, the more interest accrues that could have been used toward other investments.

The second way to increase equity is one we mentioned before--market fluctuation--namely appreciation. To improve the chances of getting a high appraisal of your home, it’s important to keep up with maintenance and make smart renovation choices that will have a high return on investment.

Using home equity

The best use of home equity is to leave it be and increase its value over time. However, that isn’t always possible for all of us. Since many of us need to move before repaying our full mortgage, equity allows homebuyers to use their equity toward their next mortgage.

Another option is to take out a home equity loan or home equity line of credit. Ideally, you’ll only use these loans if you’re planning on using the loan money to increase the value of the home via home improvement projects.

Borrowing against your home equity does come with risks. Since you are putting your share of your home on the line, there is a chance of your home being foreclosed on if you don’t repay the home equity loan. However, lenders typically seek other methods of repayment or settlement before foreclosure.


This Single-Family in Dedham, MA recently sold for $382,500. This Ranch,Bungalow style home was sold by Office Dedham - Discover Properties.


73 Massachusetts Ave, Dedham, MA 02026

Single-Family

$384,900
Price
$382,500
Sale Price

5
Rooms
2
Beds
1
Baths
Spacious and bright 5 room, 2 bedroom, ranch/bungalow style home located in desired Riverdale neighborhood! This home is super well maintained and filled with original character and detail! Features include a formal living room, formal dining room with beautiful china cabinet, white kitchen with swinging door and large pantry, 2 bedrooms and full bath. There's beautiful hardwood floors, gorgeous natural woodwork, solid panel doors, one car garage (needs work) and level lot. Updates include exterior siding, gutters, downspouts, windows, heating system, hot water tank, electrical service, front stairs and more. First showings at open house on Sun 10/21/18 from 1-2:30 pm. Offers due on Tuesday 10-23-18 at 2:00 pm. Buyer agent must view property prior to submitting offer.

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123 Eastern Avenue, Dedham, MA 02026

Single-Family

$699,900
Price

9
Rooms
4
Beds
3/1
Full/Half Baths
BRAND NEW CONSTRUCTION!! This marvelous, sun filled 3 level attached single abounds with features. The 1st floor boasts a fantastic white kitchen with island, quartz counters & stainless appliances, attached to the kitchen is a living room, there is also a lovely dining area, half bath and access to the garage. The second floor has 2 good size guest bedrooms, common bath, a laundry room and gorgeous master bedroom suite with walk-in closet and master bath with double sinks and walk-in shower. The top floor won't disappoint: boasting a large bonus room and a second master bedroom suite with walk-in closet and master bath with walk in shower. Finishes include tiled baths, quartz counters, stainless steel appliances, hardwood floors throughout, a nice rear deck, 1 car garage, central air and so much more. Conveniently located just outside of historic Dedham Center and second from major routes, shopping, Legacy Place, commuter rail and all that Dedham has to offer!!
Open House
Saturday
January 12 at 11:00 AM to 12:00 PM
Feel free to send your Buyers to this beautiful, brand new 3 level, 4 bedroom, 3.5 bath attached single family.
Cannot make the Open Houses?
Location: 123 Eastern Avenue, Dedham, MA 02026    Get Directions

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123 Eastern Avenue, Dedham, MA 02026

Condo

$699,900
Price

9
Rooms
4
Beds
3/1
Full/Half Baths
BRAND NEW CONSTRUCTION!! This marvelous, sun filled 3 level townhouse unit abounds with features. The 1st floor boasts a fantastic white kitchen with island, quartz counters & stainless appliances, attached to the kitchen is a living room, there is also a lovely dining area, half bath and access to the garage. The second floor has 2 good size guest bedrooms, common bath, a laundry room and gorgeous master bedroom suite with walk-in closet and master bath with double sinks and walk-in shower. The top floor won't disappoint: boasting a large bonus room and a second master bedroom suite with walk-in closet and master bath with walk in shower. Finishes include tiled baths, quartz counters, stainless steel appliances, hardwood floors throughout, a nice rear deck, 1 car garage, central air and so much more. Conveniently located just outside of historic Dedham Center and second from major routes, shopping, Legacy Place, commuter rail and all that Dedham has to offer.
Open House
Saturday
January 12 at 11:00 AM to 12:00 PM
Feel free to send your Buyers to this beautiful, brand new 3 level, 4 bedroom, 3.5 bath townhouse condo.
Cannot make the Open Houses?
Location: 123 Eastern Avenue, Dedham, MA 02026    Get Directions

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125 Eastern Avenue, Dedham, MA 02026

Condo

$699,900
Price

9
Rooms
4
Beds
3/1
Full/Half Baths
BRAND NEW CONSTRUCTION!! This marvelous, sun filled 3 level townhouse unit abounds with features. The 1st floor boasts a fantastic white kitchen with island, quartz counters & stainless appliances, attached to the kitchen is a living room, there is also a lovely dining area, half bath and access to the garage. The second floor has 2 good size guest bedrooms, common bath, a laundry room and gorgeous master bedroom suite with walk-in closet and master bath with double sinks and walk-in shower. The top floor won't disappoint: boasting a large bonus room and a second master bedroom suite with walk-in closet and master bath with walk in shower. Finishes include tiled baths, quartz counters, stainless steel appliances, hardwood floors throughout, a nice rear deck, 1 car garage, central air and so much more. Conveniently located just outside of historic Dedham Center and second from major routes, shopping, Legacy Place, commuter rail and all that Dedham has to offer.
Open House
Saturday
January 12 at 11:00 AM to 12:00 PM
Feel free to send your Buyers to this beautiful, brand new 3 level, 4 bedroom, 3.5 bath townhouse condo.
Cannot make the Open Houses?
Location: 125 Eastern Avenue, Dedham, MA 02026    Get Directions

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