Homeownership is a long-term investment, and over time, your home is likely to increase in value. This increase in value is called equity. Equity is the portion of your home’s value that you actually own – it’s the difference between what your home is worth and how much you still owe on your mortgage. Equity can be a powerful financial tool, and it’s important to understand how it works. As your home appreciates, your equity will increase. You can access this equity by taking out a home equity loan or line of credit. The funds can be used for any purpose, from making home improvements to consolidating debt. And since the loan is secured by your home’s value, it typically comes with a lower interest rate than other types of loans. So if you’re looking to tap into the equity in your home, a home equity loan or line of credit may be a good option.
