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“Struggle is a never-ending process. Freedom is never really won. You earn it and win it in every generation.” – Coretta Scott King

July 27, 2021

What to do when your home value is HIGH, but you don’t want to move.

The market is hot right now, but that doesn’t mean you have to sell to get the most value.

Your home value is your greatest asset in 2021. Here’s why.

While some things are not changing post-pandemic as quickly as we would like, some things are changing faster than we could have anticipated.

Enter a HOT housing market.

After all, if our travel and large gathering plans have had to be put on hold, then we might as well make the best of the place we’re spending more time at than ever before, right?

For many, home has become a refuge over the last 18 months. That’s why more people are using their discretionary money to invest in new homes. It’s a seller’s market. We are seeing home values increase dramatically. The average homeowner can get more money for their home than they thought possible.

But, there are some downsides to selling. You are likely going to have to pay more for that new house than you would want. It might not be in as nice of a neighborhood or the utilities could be more expensive than you currently pay.

A high home value does not mean you have to sell.

Fortunately, there’s great news for the homeowner who wants to stay in their home.

Those increased values for the homes selling fast on today’s market are actually bumping the value of your home up, also. This means that the equity (the difference in what your house is worth less what you owe on it) in your house has been bumping up while the prices of other homes have increased.

Here are ideas of what you can do with that equity that will make your life easier and more enjoyable:

Make home your happy place.

What are the things around your home that you would change? We all have something that would make it just perfect! Is it a new pool? An outdoor fireplace in the backyard? Are those cabinets in kitchen just not the right style? Have you been itching to try poured and stained concrete floors? Maybe it’s soundproofing for your budding rock-star drummer who’s still missing the beat and losing the rhythm?

The good news is that by using the cash equity that you’ve built up in your home, you can make those changes to your home and love it even more than you already do!

Use your home value to pay Off existing debt.

Are you carrying a balance on your credit cards or one of those forever-to-pay-off student loans? According to the average interest rate being paid on credit cards in July, 2021, is 16.16% APR. With the lower mortgage interest rates currently available, you can use your home equity as a secure loan with a rate as low as 2.99% APR for five years depending on your financial institution.

This option pays off your credit card balance or higher interest rate student loans at a much lower rate allowing you to pay more to the principal saving you money and paying off your balance quicker!

Start the business.

In today’s economic climate, many people are reevaluating their priorities. Some say 2021 is the year of the great resignation. This might be the ideal time to start that home-based business you’ve been thinking about for the past several years. Using your home equity for start-up costs is a smart business move. It could save you money at the beginning of getting your new venture up and running versus the expense of a higher interest business loan.

Plan and take the vacation.

As so many of us have shifted priorities and been limited in visiting with our friends and family, this might be the time to find that location that offers safety and fun for your extended family. Maybe it’s to celebrate a family wedding or a milestone event like the twins graduating from college during a pandemic.

Vacations look different these days, but they are still possible with some creative planning. Rather than using a personal or vacation loan at a 9% interest rate or higher, another alternative is your home equity.

The options of what you can do with the wise home investments you’ve made are only limited by your imagination. Keep in mind that rates and terms vary from financial institution to institution and there’s likely to be some fees associated with your loan such as origination, underwriting, or processing fees. Depending on the governing authority, these fees will be limited to a percentage of your loan amount. (In Texas, it shouldn’t exceed 2% of the loan amount. Texas also limits the maximum home equity loan to 80% of your home’s value.)

Don’t waste your home value. If you are thinking that a home equity loan might be the right option for your plans, you can learn more here.

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