Your Home Equity Can take You Places

Published:
July 29, 2021
Last updated:
April 7, 2022
In This Article

Do you currently own a home? If so, you may have a lot of home equity built up that you can tap into to cover a number of expenses. And if you don’t currently own a home, perhaps buying one in the near future may be a wise decision that can help you start building wealth.

In the US, home prices have been increasing at a rapid pace over the past few years. Just in the past year alone, home prices in the US have skyrocketed 20.3% over the past 12 months, according to real estate research firm Zillow. Home prices are currently averaging $331,533 in the US.

Your Home Equity Can take You Places

What is Home Equity?

Home equity is the difference between your home’s value and the amount you still owe on your mortgage. For instance, if your home is worth $600,000 and you still owe $400,000 on your mortgage, your home equity is $200,000.

Both the increase in value of your home over time coupled with your regular mortgage payments contribute to the increase in home equity.

Average Equity on Mortgaged Homes

In the US, the average amount of equity that homeowners have in their homes is $216,000. That’s quite a bit of money. When homeowners sell, they can pocket much of that equity (minus any fees or commissions). Or, they can use that money to cover a large expense.

How Much Home Equity Have Americans Accumulated?

The amount of wealth Americans have stored in their homes has gone up astronomically. Over the past 12 months alone, the average equity gain among American homeowners was $33,400. Imagine making an extra $33,400 simply by owning a home and paying your mortgage like you normally would!

With home equity gains, you can build significant wealth over time. And if necessary, you can also use all that accumulated equity to cover large expenses that may come your way.

Let’s take a look at home equity gains among homeowners across the Pacific Northwest, according to data collected by CoreLogic.

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Home Equity Gains in Idaho

Homeowners in Idaho have seen an average equity gain of $71,000 over the past 12 months. In fact, Idaho has seen the highest gains in home equity out of all states in the US.

The housing market across the state has been sizzling over the past year, with places like Boise that have seen home prices soar over 41% over the past year alone. People who bought homes just last year have been able to profit quite a bit simply by owning and operating a home.

Right now, the average home price in Idaho is $467,315, an increase of over 28.1% over the past 12 months.

Home Equity Gains in Washington State

In the state of Washington, homeowners have seen an average equity gain of $66,000 over the past 12 months. The average home price in the state is currently $593,897, marking a 24.1% increase over the past 12 months.

Several centers in the state have contributed to the increase in home prices. Seattle, for instance, experienced a 14.6% increase in home prices over the past year, which now sit at $932,382. And on the other end of the state in Spokane, home prices have soared 27.6% over the past year, and now sit at $400,131.

Home Equity Gains in Colorado

In Colorado, the average equity gain over the last 12 months is $47,000. Currently, the average home price in the state is $558,210, which is 23.5% higher than it was the same time last year. In Denver, home prices have increased 19.6% over the past 12 months and are now at $608,955.

Home Equity Gains in Oregon

The average equity gain over the last 12 months in Oregon is $44,000. Home prices in Oregon are now at $500,271, which is 19.7% higher than where prices were last year. In Portland, the average home price is $574,291, which marks a 13% increase over the past 12 months.

What Can Your Home Equity Do For You?

As mentioned, you can profit handsomely if you sell your home after accumulating a great deal of equity in your home over the years. But you don’t necessarily have to wait to sell your home in order to tap into your home’s equity.

Here are a few ways that you can use your home’s equity.

Home Renovations

If your home is in need of updating, you may have been holding off on making any changes simply because the cost of renovating is too great. But with home equity built up, you may be able to access that money to cover the cost of renovating your home.

College Tuition

The cost of post-secondary education continues to rise every year, making it very difficult to pay for college or university without the help of a student loan. But you may also be able to cover this large cost by using the equity you’ve built up in your home. That way you don’t have to burden yourself or your grown child with a hefty student loan that can take years and years to pay off.

Start a Business

If you’ve always dreamed of starting your own business and have a great idea that you strongly believe will be successful, you’ll still have some capital to get started. While you can always take out a small business loan, you may also be able to use the equity from your home to start your business.

Move Up Into Your Dream Home

When you first bought your home, you may have decided to start off with a “starter home” that was more affordable and wouldn’t leave you “house poor.” But now that your home is worth a lot more than what you paid for it and you’ve whittled your mortgage down to a lower amount, you may be able to move up into a home that you’ve always dreamed of but couldn’t afford a few years ago.

Home Equity Loans to Help You Tap Into Your Equity

In order to use the equity you’ve built up in your home, you can take out a home equity loan. With this loan type, you’ll use the equity of your home as collateral, and the loan amount is based on the value of your home, which is determined by an appraiser appointed by your lender. There are plenty of reasons to use a home equity loan:

  • You only need to apply once
  • You may be able to secure a lower interest rate compared to a personal loan
  • There are no restrictions on how you choose to use the money

If you’re ready to take advantage of the equity in your home, Sammamish Mortgage can help!

Get an Instant Mortgage Rate Quote Today

Ready to Apply For a Mortgage?

Do you have questions about the current mortgage interest rates and home loans? Or are you ready to apply for a mortgage to buy a home? If so, Sammamish Mortgage can help. We are a local mortgage company from Bellevue, Washington, serving the entire state, as well as Oregon, Idaho, and Colorado. We offer many mortgage programs to buyers all over the Pacific Northwest and have been doing so since 1992. Contact us today with any questions you have about mortgages.

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