Can your home equity upgrade your life?

Homeowners today have a lot of equity built up. Like a whole lot. But what does that really mean? 

Equity isn’t just a number, it’s a powerful asset that when used well, can shape a homeowners plans and life in ways they may not have imagined. 

How Much Equity Do Homeowner Have?

As you pay your mortgage payments, you build equity by lowering how much you still owe on the home. It's slow at first, but grows more rapidly. By lowering what you owe, and your home value rising, you build equity.  It's the difference between the market value of your home and what is still owed. 

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. 

Substantial equity protects you from foreclosure, as you can use it to carry through tough times or sell to realize your gain and pay off the lender. 

If you have substantial equity in your home, you can use it to upgrade your life! 

1. Get that Home That Better Fits Your current life

Your needs change over time. Maybe your home is starting to feel cramped, or maybe you have more space than you need. Either way, you can use your equity as a down payment on a home that’s a better fit for what you need now. You may even have enough equity in your home to buy your next house with cash. 

2. Upgrades

And if you’re not ready to move just yet, you could reinvest it in your current home instead. Renovations like a kitchen refresh, updated bathrooms or hardwood flooring could add value when it is time to sell. Talk to a real estate agent before you tackle your project list, so you can prioritize updates that’ll give you the biggest bang for your buck. 

3. Fund a Major Life Goal

Equity can also help fund your life goals – whether it’s starting a business, retirement saving, covering education costs, or helping out someone you love. Some homeowners are even passing down some of that wealth to help fund a loved one’s down payment on a home.

4. Invest in Real Estate

Equity can also be a launching pad into real estate investing. Many homeowners are tapping into their existing home value through a home equity line of credit or cash-out refinance to fund the purchase of a rental property.

With rental demand remaining strong in growing markets like "the 919," this strategy allows you to turn passive equity into an income-producing asset. Over time, you benefit from both rental cash flow and appreciation on the new property. It is one of the most effective ways to build long-term wealth using resources you already have.

Your Next Steps

If you’re interested in using your equity for one of the reasons above, here’s what to do:

• Step 1: Ask 919 Realty Group for a personalized equity assessment on your home.
• Step 2: Meet with a financial advisor if you’re interested in using that equity.

Because when it comes to tapping into this resource, there are a few things you’ll want to keep in mind as a general rule of thumb, you want to maintain at least 20% equity in your home as a financial cushion – something many homeowners didn’t know back in the crash of 2008.

Bottom Line

Your home equity is one of the biggest financial assets you have. Whether you’re thinking about moving, remodeling, investing or working toward a big goal, it’s worth exploring your options. Reach out to a financial advisor to learn more. The  919 Reatly Group is happy to connect you with lenders we know like and trust.