Your home is an investment, perhaps the largest one you’ve got. The house’s worth was determined when you purchased it, and it might have grown or dropped since then. Through the 1990s and early to mid-2000s, home prices rose steadily year after year. Many homeowners obtained cash-out refinances or second mortgages to gain access to the equity in their homes. When home values ceased increasing or even started to decrease, many homeowners understood their home’s equity had been gone. Fortunately, there are strategies to reconstruct your home’s equity without relying on your home to appreciate.
Determine whether you can lower your mortgage’s interest rate with a refinance. Dust off the paperwork from your last mortgage and see the notice. It will tell you exactly what the mortgage interest rate is in your present loan. Contact mortgage creditors and ask for quotes for your refinance. If it is possible to lower your speed and your payment appreciably, do so.
Explore bi-weekly payment options. These programs have you cover half of your mortgage payment every other week. As there are 52 weeks per year, that means you will find 26 bi-weekly payment cycles every year. 26 half-payments equals 13 full payments. That one extra payment per year will help you build equity in the home.
Pay your present mortgage payment amount when you refinance into a lower interest rate loan. Should you lower your mortgage payment by $200 and you continue to create the old higher payment amount every month, this will pay off your loan and build equity by $2,400 annually.