![]() ![]() ![]() Remember these sites just provide an estimate. To estimate your home?s equity, look up the current market value of your house on a website like Zillow or Redfin. If the fair market value of your home declines from $300,000 to $280,000 then your equity will decline by $20,000. Remember that when home prices in your community fall, the amount of your home equity can go down as well. This is great because rising home prices can help you build equity. The other way your home equity can increase is when the value of homes in your community increases. As housing prices around you go up, your home's value will probably go up too.įor example, if you bought your house five years ago for $250,000 and the current fair market value of your house is $300,000 ? that extra $50,000 becomes part of your home equity. Making additional payments also helps save on interest because you are paying off your loan faster. You may be able to build equity faster by paying more than you owe each month, by making an extra mortgage payment each year, or by moving to bi-weekly mortgage payments. That means your mortgage payments are likely to make only modest contributions to your home equity. In the early years of homeownership, more of your monthly bill goes to paying for the interest than paying down the principal. Part of this payment goes towards paying down the principal, which is the amount of money you owe for your home. One way you can increase your home equity is by making mortgage payments. ![]()
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