If you have owned your home for a little while, chances are you now have equity. You can use this equity for many things including buying a bigger home.
Equity = The difference between the value of your home and the balance of your mortgage. eg. If your home is valued at $1.5 million and you owe $600k you have $900k in equity.
Make sure you seek independent advice before making any decisions about your equity.
Ways to use the equity
Sell – You can sell your home and use that money to buy your next property. Upsize to a larger home or to another location to suit your family.
Keep – Keep your home as an investment and use the equity to provide a deposit for your new home. Rent out your original home to pay back the mortgage of the 1st home.
Keep – Use your equity to buy an investment property. You won’t have to move but you can still grow your property wealth.
Renovate – Borrow additional money to renovate and increase the value of your current home using the equity.
Check your numbers
Selling or keeping the banks will still evaluate your ability to pay back any mortgage you have. They will look at your expenses and the potential income you may have if you keep your property as an investment.
Know your own budget and down get too carried away with what you are planning.
Financial advisors, mortgage brokers, conveyancers and more all can help you ensure that you know the costs involved in what you are planning.
You don’t have to move
If you love where you live then renovate make your home better or use the equity to buy an investment property. Do what is going to work for your family and your circumstances, there are no set rules. Equity just gives you the freedom of a few more choices.
Naturally, if you are buying or selling we would love to help, contact Select Conveyancing today.