This 2022 holiday season, if you’re a Santa Fe, New Mexico homeowner, odds are your equity has grown significantly during the pandemic housing boom as home prices skyrocketed and you made your monthly mortgage payments. Home equity builds over time and can help you achieve certain goals. According to the latest Equity Insights Report from CoreLogic, the average borrower with a home loan has almost $300,000 in equity right now.
As you weigh your options, especially in the face of inflation and talk of a recession, it’s important to understand your assets and how you can leverage them. This article is a resource to help you understand how much home equity you have and advise you on some of the ways you can use it. Here are a few examples.
1. Buy a Home That Fits Your Needs
If you no longer have the space you need, it might be time to move into a larger home. Or it’s possible you have too much space and need something smaller. No matter the situation, consider using your equity to power a move into a home that fits your changing lifestyle. Your home equity gives you options and choices this season.
If you want to upgrade your house, you can put your equity toward a down payment on the home of your dreams. And if you’re planning to downsize, you may be surprised that your equity may cover some, if not all, of the cost of your next home. It is important to have a conversation so I can help you figure out how much equity you have and how you can use it toward the purchase of your next home.
2. Reinvest in Your Current House
According to a recent survey from Point, 39% of homeowners would invest in home improvement projects if they chose to access their equity. This is a great option if you want to change some things about your living space but you aren’t ready to make a move just yet.
Home improvement projects allow you to customize your home to suit your needs and sense of style. Just remember to think ahead with any updates you make, as some renovations add more value to your home and are more likely to appeal to future buyers than others. For example, a report from the National Association of Realtors (NAR) shows refinishing or replacing wood flooring has a high cost recovery. Now, if you are updating only because you are thinking about selling your house, this is another reason to have a conversation BEFORE you start a project. Why? Not all projects will give you the highest return when you sell. And it is important to use licensed contractors who will provide a warranty. Lean on a local professional for the best advice on which projects to invest in to get the greatest return on your investment when you sell.
3. Pursue Your Personal Dreams and Goals
In addition to making a move or updating your house, home equity can also help you achieve the life goals you’ve dreamed of. That could mean investing in a new business venture, retiring or downsizing, or funding an education. While you shouldn’t use your equity for unnecessary spending, leveraging it to start a business or putting it toward education costs can help you achieve other lifelong goals.
Bottom Line
Your home equity can be a major game changer for you as we move into 2023. Remember, home equity is not the same as home value. If you’re unsure how much equity you have in your home, let's connect so you can plan ahead for 2023. The next move is yours. Call or text Emily Medvec at 505-660-4541 and get started. Emily loves opening doors and providing you with the information you need to make your best decisions!
Thank you for reading and/or commenting on this blog post. Santa Fe home image licensed from Medvec Media and Shutterstock.
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