What Every Homeowner Should Know About Their Equity
Author: Destiny Aigbe
August 6, 2024
If you're considering selling your home, understanding how much equity you have is the first step to determining what you can afford when you move. With home prices having risen significantly over the past few years, many homeowners have more equity than they realize. This blog provides insights into home equity and how it can impact your next move.
What Is Home Equity?
Home equity is the difference between your home's current market value and the remaining balance on your mortgage. For instance, if your home is valued at $400,000 and you owe $200,000 on your mortgage, your equity would be $200,000. Recent data from the Census and ATTOM indicates that a majority of Americans have substantial equity in their homes. In fact, more than two-thirds of homeowners have either fully paid off their mortgages or have at least 50% equity.
Why Is Home Equity Important?
Having significant equity in your home means you have more leverage and financial flexibility when selling. This equity can be used to cover the down payment on your next home, pay off debts, or invest in other opportunities. Understanding your equity position helps you make informed decisions about selling your home and planning your next move.
Steps to Take Next
- Determine Your Home’s Value: The first step is to get an accurate estimate of your home’s current market value. This can be done through a professional appraisal or by consulting with a local real estate agent.
- Calculate Your Equity: Subtract the remaining balance on your mortgage from your home’s current market value. This will give you a clear picture of your equity.
- Consult with Experts: Work with a real estate agent to understand the selling process and market conditions. Additionally, talk to a tax professional or financial advisor to understand the financial implications of selling your home.
- Plan Your Next Move: Use your equity to determine what you can afford for your next home or other financial goals. A real estate agent can help you find properties within your budget and guide you through the purchasing process.
The Role of a Real Estate Agent
A real estate agent is an invaluable resource when selling your home. They provide expertise in pricing your home accurately, marketing it effectively, and negotiating the best terms. They also help you understand your equity and how it can be leveraged in your next purchase.
Conclusion
Home prices have increased, and so has your equity. Understanding your home equity is crucial for making informed decisions about selling and buying a new home. Consult with a local real estate agent, tax professional, or financial advisor to get a comprehensive understanding of your financial situation and to move forward confidently.
Contact Us
If you have any questions or need legal assistance regarding selling your home, understanding equity, or any other real estate matters, please contact our firm. Our experienced team is here to guide you through every step of the process.
Disclaimer
This blog post is for informational purposes only and does not constitute legal advice. Always consult with a legal professional for specific guidance related to your situation.
About the Author
Destiny Aigbe
Managing Partner
Aigbe Law PLLC | Dark Alpha Capital
A Corporate and Securities Law Firm
With a robust foundation in law and finance, Destiny Aigbe has carved a distinguished career, underpinned by his pivotal role in orchestrating and managing complex transactions that have propelled companies to significant growth and market prominence. As a seasoned attorney and strategic advisor, Destiny has been instrumental in facilitating over $75 million in capital raises, demonstrating a keen acumen for securing funding and fostering investor confidence.
Destiny's leadership in the execution of six successful public listings, through meticulously structured reverse mergers and registration statements, showcases his adeptness in navigating the intricacies of the public markets and his capacity to guide companies through transformative growth phases. His involvement in five mergers as an operator further illustrates his versatile skill set, extending beyond legal expertise to include hands-on management and operational strategy, though these ventures did not involve funding.
Destiny's professional journey is marked by a commitment to excellence and a diverse range of experiences, from representing a wide spectrum of clients including public and private companies, and investment firms, to holding significant roles within the US government. His tenure with the US Department of State and the National Institutes of Health highlights his adaptability and his contribution to the advancement of entrepreneurial ventures in sectors like biotechnology and nanotechnology through strategic funding initiatives.
An alumnus of Vanderbilt University Law School, Destiny focused on Finance and Mergers & Acquisitions, further honing his expertise with a certificate in Law and Business. His foundational education in Finance was obtained with honors from the University of Maryland's Robert H. Smith School of Business, which laid the groundwork for his subsequent achievements in investment banking and legal practice.
Residing in the Washington, D.C. area, Destiny Aigbe continues to leverage his extensive experience and insightful leadership to drive innovation, growth, and success for his clients and the ventures he is involved with.
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