Obvious – and Not so Obvious – Ways to Build Equity in Your Home

Equity, the one thing that every homeowner wants. But aside from paying your monthly mortgage payment regularly, how can you build equity in your home so that it’s yours, and only yours, sooner?
Make a Larger Down Payment
This is one of the best ways to build equity in your home because the more you pay upfront of course, the less you’ll have to pay over time. However, because the down payment is made before you even move into your home, you need to think about this while you’re setting up your mortgage. Most lenders require 5% – 20% but paying even just a bit more such as 25%, will be a huge step in building equity in your home.
Make Larger Monthly Payments
If you’ve already set up your mortgage and are now making regular monthly payments, obviously making more than the required amount will help pay down your mortgage faster and build more equity in your home. Plus as an added bonus, you’ll pay less in interest too!
Shorter Mortgage Term
Paying off your mortgage in 10 years is going to mean higher monthly payments; but you’ll be building more equity in your home with every dollar you pay. Plus, choosing a shorter term to begin with, or just using a home refinancing loan to get a shorter term will do the same thing as making larger monthly payments. As an added bonus here, you won’t rely on just making a bigger payment on your principle – something that could result in prepayment fees.
Home Renos
Of course you don’t always have to pay money onto your mortgage in order to build equity in your home; another method is to increase the value of your home and the best way to do this is home renovations. Be careful when treading reno water though. You want to make sure the investment is a sound one that will pay off, such as a kitchen or bathroom, in order to really build equity in your home.