{"id":16425,"date":"2021-07-28T00:10:52","date_gmt":"2021-07-28T00:10:52","guid":{"rendered":"https:\/\/woodriverweekly.com\/?p=16425"},"modified":"2021-07-27T20:12:24","modified_gmt":"2021-07-27T20:12:24","slug":"the-dynamics-of-home-equity","status":"publish","type":"post","link":"https:\/\/woodriverweekly.com\/index.php\/2021\/07\/28\/the-dynamics-of-home-equity\/","title":{"rendered":"The Dynamics Of Home Equity\u00a0"},"content":{"rendered":"

BY ANNA & MICHELLE\u00a0<\/span><\/em><\/p>\n

For many people, their home is their largest asset and their best performing investment.\u00a0The equity in a home is the difference in what it is worth and what is owed.\u00a0Two dynamics, appreciation and unpaid balance, work in concert to make homeowner\u2019s equity grow.<\/span><\/p>\n

It can be said that you appreciate the fact that your home is your best financial investment.\u00a0It is also ironic that the appreciation, the increase in value, is what causes it to be your best financial investment.<\/span><\/p>\n

In a one-year period, the increase in value divided by the beginning value will determine the rate of appreciation for the year.\u00a0News stories and articles frequently report statistics on appreciation for the month, the year or longer. In many cases, a national appreciation is mentioned but the local appreciation is more reflective of an individual property.<\/span><\/p>\n

The National Association of REALTORS\u00ae reports,\u00a0\u201cThe median existing-home price2\u00a0for all housing types in June was $363,300, up 23.4% from June 2020 ($294,400), as every region recorded price jumps. This marks 112 straight months of year-over-year gains.\u201d<\/span><\/p>\n

The low inventory being experienced nationwide has caused some significant appreciation that has increased homeowners\u2019 equity.\u00a0According to Black Knight, a mortgage technology and research firm, at the end of 2020, roughly 46 million homeowners held a total of $7.3 trillion in equity.<\/span><\/p>\n

If a homeowner has a mortgage on their home, while the home is appreciating, the unpaid balance is declining.\u00a0An increasing portion of each payment is applied, when the payment is made, to the principal balance to retire the debt based on the term of the loan.<\/p>\n

Each month the equity in the home becomes larger because the home is worth more due to appreciation and the unpaid balance is less due to amortization.<\/span><\/p>\n

Once a homeowner has sufficient equity in their home, they can borrow against it and take cash out of their home.\u00a0Most lenders require that the homeowner maintain at least 20% equity position.\u00a0This means that owners can borrow up to 80% of the appraised value less the amount that is currently owed on the property.<\/span><\/p>\n

The options include a cash-out refinance mortgage or a home equity line of credit, HELOC.\u00a0While some institutions have stopped offering HELOCs, they are still available.<\/span><\/p>\n

\u00a0The HELOC is a line of credit that is established for usually 10 years.\u00a0The owner is approved, and the money is available to draw out as needed.\u00a0The interest is calculated daily.\u00a0Like a credit card, when the balance is paid down, the unused portion of the available credit is available again.<\/span><\/p>\n

Your real estate agent may be able to offer some lender suggestions.<\/span><\/p>\n

 <\/p>\n

\"\"<\/p>\n","protected":false},"excerpt":{"rendered":"

BY ANNA & MICHELLE\u00a0 For many people, their home is their largest asset and their best performing investment.\u00a0The equity in a home is the difference in what it is worth and what is owed.\u00a0Two dynamics, appreciation and unpaid balance, work in concert to make homeowner\u2019s equity grow. It can be said that you appreciate the […]<\/p>\n","protected":false},"author":1,"featured_media":16426,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"tdm_status":"","tdm_grid_status":"","_pvb_checkbox_block_on_post":false,"footnotes":""},"categories":[64,38],"tags":[],"class_list":["post-16425","post","type-post","status-publish","format-standard","has-post-thumbnail","category-better-homeowners-news","category-sponsored"],"_links":{"self":[{"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/posts\/16425","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/comments?post=16425"}],"version-history":[{"count":1,"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/posts\/16425\/revisions"}],"predecessor-version":[{"id":16427,"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/posts\/16425\/revisions\/16427"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/media\/16426"}],"wp:attachment":[{"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/media?parent=16425"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/categories?post=16425"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/tags?post=16425"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}