According to the Federal Housing Finance Agency (FHFA), the Census, and ATTOM, a property data provider, just over two-thirds (68.7%) of homeowners have either fully paid off their mortgages or have at least 50% equity (see chart below):
Americans Sitting on Tremendous Equity 68.7% Have Paid Off Their Mortgage or Have at Least 50% Equity
Mortgaged Homes with Greater Than 50% Equity Mortgaged Homes with 30-50% Equity Mortgaged Homes with 10-30% Equity Mortgaged Homes with 0-9% Equity Mortgaged Homes in Negative Equity Owns the Home Free and Clear
30%
38.7%
20.8%
0.12%
8.6%
1.72%
Sources: FHFA, Census, ATTOM
That means nearly 70% of homeowners have a tremendous amount of equity right now.
How Equity Helps with Your Affordability Concerns
With today’s affordability challenges, your equity can make a big difference when you decide to move. After you sell your house, you can use the equity you’ve built up in your home to help you buy your next one. Here’s how: •Be an all-cash buyer: If you’ve been living in your current home for a long time, you might have enough equity to buy a new house without having to take out a loan. If that’s the case, you won’t need to borrow any money or worry about mortgage rates. •Make a larger down payment: Your equity could be used toward your next down payment. It might even be enough to let you put a larger amount down, so you won’t have to borrow as much money so today’s rates become less of a sticking point. Experian explains: “Increasing your down payment lowers your principal loan amount and, consequently,
your loan-to-value ratio, which could lead to a lower interest rate offer from your lender.”
Bottom Line
If you're thinking about moving, the equity you've built up can make a big difference, especially today. To find out how much equity you've got in your current house and how you can use it for your next home, let’s connect.
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