Blair Broussard

Blair Broussard

How to Find Money in Your Home : Leveraging Your Home’s Equity

We all know the housing market has been a wild roller coaster ride ever since the pandemic. I break it all down about how we got to the Seller’s Market of 2020 before the pandemic hit in this blog here. Basically, the real estate market is cyclical and while variables of the market change regularly, the market rarely stays in balance for long. This makes timing the market tricky, and something I strongly advise against. 

 

Timing plays a lot into the decision to buy and sell a home. Many times my clients outgrow their homes, or need to transfer due to career changes, and sometimes life simply demands a move. Either way, there are options many Buyers and Sellers forget about when thinking about their current or future home: home equity. 

 

What is home equity? 

 

Home equity is the market value of your property less any mortgages/liens owed on the property. Essentially, the profit you make from selling your home minus paying off your current mortgage. Since home prices have increased I have seen client’s home equity increase as well. Investopedia.com does a great job of explaining the options of what home equity can do for you if you want to stay in your current home. Most of my clients opt to move over live-in renovations. Having gone through 3 live-in renovations myself with two young kids I would opt to move over doing another renovation again. Phew. 

 

What can I do with my home equity? 

 

  1. Use the profits from selling your home and apply that money toward another home of your choice. This is one of the most common scenarios I see in the field on a regular basis. Many clients looking to make a change use their home equity to get into a bigger home, a nicer home, or move into a more expensive market. 
  2. Borrow equity from your home to make improvements to your house. This is a great way to complete a renovation, make an addition, or finish an improvement project you’ve already started. Many lenders have specific products for renovations that utilize home equity for clients that don’t have cash on hand. I work with many local lenders who can help you utilize your home equity to improve your home in Lafayette, La. 
  3. Home Equity Line of Credit or HELOCs, which is essentially a credit card style loan against your home that can be used for an array of projects and goals. I’ve seen clients use this product to add an outdoor shed, pool, detached garage, etc. Interest rates are varying depending on your specific situation. 

 

Why is home equity important? 

 

As your real estate expert it is my job to ensure you know all of your options. Many of my clients who are limited by their overall price point don’t realize that with time they too can utilize home equity to improve their home. Should you love your neighborhood and location but aren’t in love with your home’s layout can be fixed by utilizing your home equity to make improvements. 

 

Interest rates have been all the rage, at times enraging, and a major factor in you deciding to buy or sell your home. While interest rates won’t dip into the 2 or 3 percent interest rates for the foreseeable future, you can use your home equity to make moves. Interest rates can be bought down, I explain it all here, and home equity can be applied to your next home’s down payment. Depending on your financial situation, increasing your down payment can help decrease your mortgage payments eliminating mortgage insurance. 

 

How do you need to use your home equity? 

 

Let me know if you’re using it to make a move or make an improvement! Email me at blair@blairbroussard.com