CATEGORIES
- ALL
- VIC
- QLD
- SA
- NSW
All Categories
Home Design Inspiration
Home Finance Tips
Home Building Tips
Knockdown and Rebuild
Latest News and Burbank Updates
Property Insights and Investments
Home Building Master Class
All Categories
Home Design Inspiration
Home Finance Tips
Home Building Tips
Knockdown and Rebuild
Latest News and Burbank Updates
Property Insights and Investments
Home Building Master Class
Related Articles
Building Your Dream Home: Avoiding Common Pitfalls + Maximising Success
see more.
Unveiling the Secrets of a Flawless Home Build: Expert Tips and Tricks
see more.
Building on a Budget: Smart Strategies for Affordable Home Construction
see more.
Do You Need a 20% Deposit and Why Saving Could Be Costing You Money
see more.
Acreage Retreats to Metropolitan Havens: Exploring Land Options
Unlocking the Power of Equity in Housing: A Guide for Homeowners
Equity is a term that often comes up in discussions about homeownership and real estate. It holds significant value and can be a powerful tool for homeowners. In this edition of our "Building Masterclass" series, we'll delve into the concept of equity in housing, providing a clear definition and exploring how you can leverage it to your advantage.
Equity, in the context of housing, refers to the portion of your property's value that you truly own. It is the difference between the market value of your home and the outstanding amount of your mortgage or any other debts secured against the property. As you make mortgage payments over time, your equity increases, representing your ownership stake in the home.
For example, if your home's market value is $750,000 and you have a remaining mortgage balance of $500,000, your equity in the property would be $250,000. This equity is an asset that you can potentially utilise for various purposes.
In the new home construction space, equity is generated even throughout the construction process. Where it isn’t abnormal for the value of the vacant lot of land would have increased by the time your building is finished. It is important especially in new home construction, you are aware of the finished property values in your area as in many circumstances you can generate equity quicker than in an established property.
How Can You Use Equity?
1.Borrowing against your asset for a new home or purchase: Any equity can be used as an asset in securing a new home loan for another new property, whether it be another new home build, or an investment.
It's important to note that leveraging your home equity comes with responsibilities and potential risks. Before using your equity, it's essential to carefully assess your financial situation, consult with professionals, and consider the long-term implications of your decisions.
2. Debt Consolidation: If you have high-interest debts, such as credit card debt or personal loans, you can use your home equity to consolidate these debts into a single, more manageable loan. This allows you to take advantage of lower interest rates offered on home equity loans or lines of credit, potentially saving you money on interest payments.
3. Emergency Funds: In unforeseen circumstances, having access to equity can provide a safety net. If you face unexpected expenses or financial challenges, using your equity as an emergency fund can help you navigate difficult times without resorting to high-interest loans or credit cards.
4. Home Improvements and Renovations: One popular use of equity is to fund home improvement projects. By tapping into your equity, you can finance renovations, remodels, or additions to enhance your living space and increase the value of your property. Improving your home not only improves your quality of life but can also yield a higher return on investment if you decide to sell in the future.
Equity is a valuable asset that homeowners can utilise for various purposes. By understanding the definition of equity and exploring its potential uses, you can make informed decisions about how to leverage this resource to your advantage. Whether it's funding home improvements, consolidating debt, establishing an emergency fund, or borrowing against this asset for a new property - tapping into your equity can provide financial flexibility and support your goals. However, it's crucial to approach equity usage responsibly and seek professional guidance to ensure you make sound financial choices that align with your long-term objectives.
NOTE: The information within this blog is intended to be general in nature and is not personal financial advice. Burbank is not a financial advisor. You should consider seeking independent financial advice to check how the information relates to your unique circumstances.
Related Articles
Building Your Dream Home: Avoiding Common Pitfalls + Maximising Success
Building your dream home is an exciting journey filled with endless possibilities. However, it's essential to approach this process with careful planning and consideration to avoid common pitfalls that can derail your project. In this Building Masterclass, we'll explore key strategies to help you navigate the construction process smoothly, minimise delays and unexpected costs, and maximise the success of your dream home.
more.
Unveiling the Secrets of a Flawless Home Build: Expert Tips and Tricks
Embarking on a journey to build your dream home is an exhilarating experience. To ensure a flawless home build, it's crucial to follow the right order of steps and make informed decisions along the way. In this Building Masterclass, we'll unveil expert tips and tricks that will guide you through the process, from securing the perfect mortgage to selecting the ideal block of land and securing your dream home. Get ready to unlock the secrets of a successful home build! more.
Building on a Budget: Smart Strategies for Affordable Home Construction
Building your dream home doesn't have to break the bank. With careful planning and smart decision-making, you can create a beautiful and functional space while staying within your budget. In this edition of our "Building Masterclass" series, we'll share valuable tips and tricks to help you achieve affordable home construction without compromising on quality or your vision. more.
Do You Need a 20% Deposit and Why Saving Could Be Costing You Money
The notion of saving a 20% deposit for a home purchase has long been ingrained in our minds. However, it's time to explore how adhering to this conventional wisdom may actually be costing you money in the long run. In this edition of Building Masterclass, we'll explore the concept of a 20% deposit, its origins, and alternative options that can save you both time and financial resources. more.
