Should You Tap Into Your Home Equity?
Did you notice that pile of cash you're sitting on right now?
I'm not joking.
The fact is, 42 million homeowners with mortgages have equity in their home.
When added up, tappable home equity recently reached $5.5 trillion. That's about $3 trillion more than when the housing market bottomed out in 2012.
And in case you're wondering, "tappable equity" here is defined as the amount a homeowner could borrow before they hit 80% of debt to value.
Not surprisingly, many homeowners are looking to tap into these hidden reserves.
As just one sign of this, mortgage applications are up 4.1% this January over last year.
That's mostly been driven by mortgage refinances, as homeowners are looking to take advantage of low (but increasing) rates to take out some of that equity as cash.
Another option to a mortgage refinance is a home equity line of credit (HELOC), a kind of checking account on your home.
While HELOCs have been growing in popularity, they've hit a slight snag recently because the new tax bill eliminates the deductions for interest paid on such lines of credit.
What are homeowners who tap into their equity actually doing with the extra cash?
Most people are spending it on making their homes even more valuable.
According to one survey, 80% of borrowers would consider using that cash to renovate their home.
However, other homeowners are using their home equity to cover education expenses, to pay down other debt, or simply for investing, whether in stocks, real estate, or even cryptocurrencies.
So should you tap into your home equity?
I can't say either yes or no. It’s something you’ll have to decide on your own.
But if you want to see what your home is currently worth, and what kind of equity you might actually have, take a look at this home value calculator, which takes into account recent Jupiter home sales:
Enter your street address here to find out what your home is worth
If you do decide to use your home equity to invest, and you're thinking of investing in real estate, then check out some of the great homes that have come on the Jupiter market recently:
Click here for all available Jupiter homes for sale
Finally, if you have any questions about the current real estate market and how prices will move in the coming months, give us a call at 561-295-1085. We're here to help.