Regardless of current real estate market conditions, several things can be done to boost a new home’s equity, even during the building process. Increasing the value of a home offers both short-term and long-term financial benefits.
Why Build Equity?
Simply put, equity is the portion of a home that the owner actually owns. For example, if the current value of a house is $475,000, and the owner has a mortgage of $200,000, then the home’s equity is $275,000, which is the difference between the home’s value and the amount of money owed to the mortgage company.
Building equity is helpful because it increases one’s overall investment picture. Negative equity—owing more money than a house is worth—is problematic, especially when it’s time to sell the property. Building positive equity can be accomplished by reducing debt and increasing the worth of a house.
Consider Your Mortgage
Paying down the loan balance more quickly than your scheduled repayment plan will increase equity at a faster rate. Consider paying a little extra principal each month, or at least for some months. Some homeowners choose a 15-year mortgage instead of a 30-year one in order to reduce debt faster.
Great Communities Build Equity Faster
Another way to quickly build equity in a newly-built home is to choose the community carefully before the house is built. Market values increase faster in communities with desirable amenities. Contact a reputable home builder to discuss what steps can be taken before building a new custom home to grow equity quickly.
An expert home building team that knows the area well can offer professional advice about design ideas, home floor plans, finishing touches, and more to help grow equity even before a new house is constructed. Call our expert team at 910-769-2440 to discover the possibilities.