So you want to know what home equity can do for you. When you purchase your home you start paying on your mortgage balance. As you do this and the value of your home goes up you build equity. That’s the difference between your home value and the amount you owe on your mortgage.
That amount of equity can be used then for several really cool strategies to expedite your retirement plan or make your life more comfortable.
Automatic Millionaire Home Equity
Here’s how to be an automatic millionaire from David Bach’s book. You take a portion of your equity and buy another home and rent out your other home. Fantastic option for growing your wealth over the long term. Or similarly you can stay in your home and buy an investment property.
Hello vacation home and short term rental income. Be careful though some cities are limiting Airbnb’s so call me first to avoid issues around that. Not a strategy I suggest but you can take it out to invest in other assets like Crypto, Stocks and precious metals.
Another use of equity can be to eliminate other debts. If you have high interest Credit cards, car loans or student loans then absolutely you should look at getting rid of those. Trust me I’m using this strategy and it’s a great option going into a recession.
The last option is to use your equity to make life comfortable. You can sell and purchase a larger, smaller or better suiting home for your needs. Use it for home improvements, to add more livable space, renovations or adding solar panels.
And lastly you can also blow that money on retirement, vacations and other large purchases. In a way your Equity is the equivalent of a long term 20 year, 30 year savings account that you pay into monthly at a fixed rate. This is your money and if done right you can use a home equity line of credit or cash out refinance to pull that money out tax free for your use.
Got questions? Reach out and we can discuss your options. Also sign up for my free tool to track and see options in real time.
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