Although you've been living in your house for 5 years, its value could have increase for several reasons meaning your mortgage balance is less than how much it's worth.
The value of your home could increase for several reasons. The two main reasons being: you're consistently paying off your mortgage balance every month or maybe you snagged a home on a piece of property that its value has increased over time making your home worth more than it was when you bought it. You can see this scenario mostly in up and coming neighborhoods.
The point is, if you've owned a home for a time being, you could have a pile of cash invested in your home waiting for you to spend. So how should you spend it? Here are a few different ways:
1. Home renovation
After years of being put to use, a roof, flooring, paint on walls can start to feel a little old and dingy. Or maybe your stove is 20 years old. Is your refrigerator not a touch screen yet? Either way, whether you are thinking of selling your house eventually or not, a home face lift would be the perfect way to spend the cash. Updating it with new technologies and trends can feel like you moved into a brand-new home. And if you're looking into putting it on the market, these upgrades will help you sell it for a better value.
2. Pay Off Debt
School loans, car loans and credit card bills have a way of never leaving your life. Investing in a HELOC or a home equity loan, you have a chance to consolidate your current debts to a lower interest rate.
Homeowners often use this pile of cash to invest in either more real estate or the stock market. Investing is always tricky. You always want to earn more than you put it, but it's never a for sure deal. The best way to go about this route is to do a lot of research beforehand.
4. Treat Yourself
If you've been working hard to consistently pay off all your loans and debt, you should not feel bad about using this chunk of change to treat yourself. Pack up the family and take a holiday vacation. You deserve it!
To learn more about how to use the equity in your home contact us today!