May 13, 2022 / Home Equity
Home values are high, like the highest they’ve ever been in our humble home state. But what does that mean for you? How much home equity do you have and what can you actually do about it? If you’re curious about how much your home is worth, check out these resources to help you calculate and unlock the power of your home equity.
In simple terms, home equity is the value of your interest in your home. You can calculate your home’s equity by finding the current market value of your home (more on that later) and subtracting any liens attached to your property, like a home mortgage.
The difference in what your home is worth and what you owe equals your home equity—the hidden value of your home sweet home. When the housing market goes up and when you make payments on your existing home loans, your home equity may increase.
Finding your home’s value isn’t an exact science. It’s essentially worth whatever someone is willing to pay for it. But you can come close to predicting a hypothetical purchase price of your home in a few different ways.
Maybe the best place to start is by talking with a realtor, who can help you compare prices of recently sold homes in your area with similar square footage and features. Most realtors are happy to help you determine your home’s value, but there are a few ways you can do the work yourself.
Online resources like Zillow can give you a ballpark estimation of your home’s value. Just type in your home address and you’ll be directed to a map of your neighborhood, complete with an estimated value of your home. Again, this isn’t an exact science, and your home may command more or less than the estimated value. But it can at least give you a starting point.
You can also hire a home appraiser to help you determine a more precise value of your home. An appraiser will essentially do the same work as a realtor, finding comparables in your area, but may do a closer inspection of your home (and charge you for the time and trouble).
Utah home values are among the fastest rising in the entire country. Lots of people want to live here and there are only so many homes to go around. This demand for new homes has created a financial frenzy, with multiple buyers vying for nearly every new home on the market. In simple economic terms, when supply is low and demand is high, prices go up.
That probably means that your home is worth more today than it was even a year or two ago. In fact, home values in the Salt Lake area have gone up almost 27 and a half percent over the last 12 months, with similar increases forecasted for 2022, according to Zillow.
If you sold your home today, you could bank every penny of your home’s equity—the sale price minus any outstanding liens. You could also put that cash into the purchase of a new home.
But what if you don’t want to sell? If you plan to stay in your current home for the time being, you can still leverage your home’s equity to access the cash, usually called a home equity loan or home equity line of credit (HELOC).
With these loans, you can make upgrades to your existing home, potentially adding even more value, or do just about anything else—take a vacation, plan a wedding, or pay off other high-interest loans.
At Utah First, when you open a new HELOC, you can get an amazing 2% introductory rate for six months. Your HELOC works like a credit card: Utah First issues a line of credit based on the equity in your home. You use as much or as little as you want for whatever you want, whenever you need it.
With home values so high, right now is a great time to leverage the extra equity in your home, even if you already have a HELOC. If you have questions about how a HELOC can help you leverage your home’s value to make improvements to your home, come talk with one of our helpful HELOC experts or apply online today and we’ll reach out to you.