Taking out a home loan and purchasing property is an investment in your future. After all, real estate is one of the biggest assets you can have, which can act as a launching pad for a whole host of different financial avenues. One thing to keep in mind is the growth of equity in your home over the long term, one of the biggest benefits of paying back your mortgage and moving towards owning your home outright.
What is home equity?
Basically, home equity is the difference between the value of your home and how much you have left to pay off on your mortgage. For example, if your home is worth $500,000 and you have $300,000 left on your mortgage, this gives you a home equity figure of $200,000.
The best thing about building up your equity is that it can be accessed through home loan refinancing, allowing you to use your home as security and use these funds for other expenses. Whether this be car repairs, a well deserved holiday, or as a deposit for future property investment - the world is your oyster.
The only thing to remember is that the bank won't allow you to use all of your home equity. This is because they're lending back to you against the property and if the value of the home dips, this can cause a number of issues in the long term for them with regards to repayment amounts.
However, building home equity is another benefit of taking out a mortgage and moving into the local property market. If you're interested in buying property, now could be a brilliant time to consider taking out a home loan and securing property in your local community.
Get in touch with a financial lender today to begin discussing the most suitable mortgage options for you.