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Home & Garden Articles
Ways to Increase Your Home Equity
Wed 23 Jul 2008 - 10:02
Ways to Increase Your Home Equity
By [http://ezinearticles.com/?expert=Yvonne_Suzannah]Yvonne Suzannah
Home equity is the difference between its current market value and the amount still owed on the home. So, if your mortgage balance decreases and your house's market value increases, your home equity will increase. For example, let's say your house is currently valued at $300,000, and you still owe $200,000 on your mortgage, hence your home equity is $100,000.
Home equity is a very valuable asset for any homeowner; many homeowners use it to get loans for home improvements, college tuition for their children, for investing in a business venture, or even for purchasing additional property. And it's a lot easier to get that loan when you have a good home equity.
There are basically two ways to increase the value of your home equity. The first way is to pay a larger sum on your mortgage down payment. This will decrease the amount owed on your mortgage balance and shorten the mortgage period as well. Those who use this approach to increase their home equity usually have some extra cash up front and they predict that the home market value will increase in future.
Of course not everybody has extra cash to pay a larger sum on down payment. The second way to increase the value of your home equity is to make improvements on your home. For example, remodel the kitchen and make it more spacious, adding a pool in the backyard, adding a new bathroom, repairing the broken roof, etc. This is also known as home improvements and the options are literally endless. It's just common sense, by taking care of your house and keep it in good condition, the value will increase.
Typically, most homeowners take advantage of the home equity by using it to get a home improvement loan; this is usually accomplised through a home equity line of credit or home equity loan. However, do remember that a home equity loan is a secured loan; meaning that your home is used as collateral. Therefore, it should be considered carefully; make sure you read and understand all the fine prints and discuss all the fees with the lender before signing on the dotted lines.
Visit our site to get more tips and information on [http://www.mortgagexplain.com/loans/guide/]Mortgage Loans Guide. You can also download a free report [http://www.mortgagexplain.com/]Private Mortgage Insurance at our site. All the information are there to help you get the best home mortgage loan deal.
Article Source: http://EzineArticles.com/?expert=Yvonne_Suzannah http://EzineArticles.com/?Ways-to-Increase-Your-Home-Equity&id=1341953
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