How Home Equity Can Help You Buy Your Next Home in Cash

One of the biggest financial benefits of homeownership is building equity in your home. Right now, many homeowners are sitting on significant amounts of home equity, and it could help you make your next home purchase in cash. Here’s how leveraging your equity could change the game and make your next move easier than you think.

What Is Home Equity?

Home equity is the difference between your home’s market value and the amount you still owe on your mortgage. For example, if your home is valued at $400,000 and you owe $200,000, your home equity is $200,000.

"Use Your Home Equity to Buy Your Next Home in Cash – Here’s How"

Why Home Equity Matters for Homeowners Thinking of Selling

Recent data shows that homeowners are sitting on more equity than ever. According to Census and ATTOM reports, more than two-thirds of homeowners have either paid off their mortgages or own at least 50% of their home’s value. This is a powerful position for homeowners looking to sell and upgrade.

In fact, CoreLogic data shows the average homeowner has $311,000 in equity built up. That’s a substantial amount of net worth that could play a key role in your next home purchase.

Buying in Cash: A Growing Trend Among Homebuyers

A significant number of buyers today are able to purchase homes in cash. The National Association of Realtors (NAR) reported that 26% of homebuyers last year were able to buy their homes without taking out a mortgage. Imagine buying your next home in cash—no monthly payments, no interest, and no mortgage headaches.

If you’re curious about how much equity you have and whether it could help you buy in cash, consider getting a professional equity assessment report (PEAR) from a real estate agent. You may be surprised by how much equity you’ve built up, and whether it’s enough to buy outright.

Even If You Can’t Buy in Cash, Your Equity Can Still Help

If you don’t have enough equity to purchase a home in cash, you may still have enough to make a larger down payment. A sizable down payment can reduce the amount you need to borrow, which can help you secure better mortgage terms.

Conclusion

Home equity is at an all-time high for many homeowners, and it’s one of the biggest reasons why all-cash buyers are becoming more common. Whether you can buy your next home outright or just make a larger down payment, your home equity is a valuable asset that can help with your next move. To find out how much equity you have and how it can benefit you, reach out to a real estate agent today.

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