- May 29, 2019
- Posted by: pinnacle777
- Category: News
One of the most significant benefits of homeownership is building equity, which is your share of the value of your home. In more technical terms, it’s the difference between the market value of your home and the amount that you still owe. If you pay 20% down on a home that costs $300,000, you would owe $240,000 and your equity would total $60,000 (the interest you’ll pay doesn’t factor into this equation). Pretty straightforward, right? However, if your home appreciates in value, your equity increases even though the amount you owe does not.
Let’s say that in a few years, the market value of your home increases to $375,000, and you’ve paid off a total of $90,000. You still only owe $210,000, but your equity would be valued at $165,000.
Research has shown that Net Worth for a Homeowner at the age of 65, is 44X Greater than the Net Worth of a Renter.
If you are aged 35 or under ~ buy a home now, imagine how much equity you could have by retirement! Instead of your money disappearing into your landlord’s pocket each month, you’ll be paying into something that can become more valuable over time.
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