Equity to Invest
Home ownership can also allow you to invest in property down the track by using the equity built up in your home over the years. This option may possibly lead you into a better financial position in your retirement. To learn more about investing in property get in touch with one of our financiers who can guide you in the right direction.
What can equity do for me you ask? Equity is your Willy Wonka, your golden ticket, your key to financial growth. How? You can use equity to borrow against! So remember the $30,000 equity you have sitting in that new house you’ve just built? Part of it may now be up for grabs if you need it!
Mortgage repayments build your very own financial future and can be your ticket to financial freedom in your retirement.
Home owners will build the golden gift of ’Equity’. Equity is defined by the monetary value of the difference between what you paid for your house and the value it is worth today. So lets say you buy a block of land today and build a house and it costs you $350,000.
That house upon completion may be valued at $380,000 (despite what it cost you to build), giving you instant equity of $30,000! Over the life of your mortgage, property prices increase and the value of your property grows yet the value of your mortgage stays the same meaning you build more and more equity with every year!
Having equity that can be tapped into if necessary is a big plus for homeowners. Having equity in your home is not only important to help pay emergency expenses, but simply having the equity available to you makes it much easier to get a loan for almost anything else. If you have, say, $60,000 in home equity, a bank will feel much better loaning you $25,000 to buy a car than if you were renting.