CHESTER COUNTY, USE YOUR EQUITY WHEN YOU SELL YOUR HOUSE

CHESTER COUNTY, USE YOUR EQUITY WHEN YOU SELL YOUR HOUSE

One of the benefits of being a homeowner is that you build equity over time. By selling your house, that equity can be used toward purchasing your next home. But before you can put it to use, you should understand exactly what equity is and how it grows. Bankrate explains it like this:

“Home equity is the portion of your home you’ve paid off – in other words, your stake in the property as opposed to the lender’s. In practical terms, home equity is the appraised value of your home minus any outstanding mortgage and loan balances.”

Majority of Americans Have a Large Amount of Equity

If you’ve owned your home for a while, you’ve likely built up some equity – and you may not even realize how much. Based on data from the U.S. Census Bureau and ATTOM, the majority of Americans have a substantial amount of equity right now (see graph below):

And having such large amounts of equity is a benefit to homeowners in more ways than one. Rick Sharga, Executive Vice President of Market Intelligence at ATTOM, explains:

“Record levels of home equity provide security for millions of families, and minimize the chance of another housing market crash like the one we saw in 2008.”

Over time, your home equity grows. In addition to providing financial stability while you own your house, when you’re ready to sell it, that money could go a long way toward paying for your next home.

HOW DOES THIS APPLY TO CHESTER COUNTY?

Check out the chart below, If you had purchased the average priced single family home in Chester county for $380,000 in 2017, by the end of 2022 you would have an estimated $236,663 in equity. Stated differently, you own 62% of the house. Your lender only owns 38%. If you are in the market for a move up buy, you can use this equity to finance the purchase and improve your family’s standard of living even more.

CHESTER COUNTY, ESTIMATED EQUITY GROWTH, LAST FIVE YEARS
Purchase Sale Price Down Payment Price Growth Estimated Total Equity Equity, %
Year Median Equity at 3.5% Equity to 12/22 Pay Down of Value
2017 $380,000 $13,300 $160,000 $63,333 $236,633 62%
2018 $399,000 $13,965 $141,000 $53,200 $208,165 52%
2019 $405,000 $14,175 $135,000 $40,500 $189,675 47%
2020 $440,000 $15,400 $100,000 $29,333 $144,733 33%
2021 $499,000 $17,465 $41,000 $16,633 $75,098 15%
2022 $540,000 $18,900 $0 $0 $18,900 4%

Naturally if you owned your home for less than those five years, your equity would be less. But even after only one year, you would have equity of $75,098. You could do a lot with that.

SUGGESTED NEXT STEPS FOR YOU TO MAKE SURE YOU HAVE THE INFORMATION YOU NEED TO MAKE THE RIGHT DECISION

  • It’s also important to remember that every local market is different. That’s why it’s essential to lean on an expert for the latest information on the market in your area if you’re planning to make a move this spring.
  • To get a quick update of what is new in real estate, click here to check out our new videos.
  • Interested in what recent clients think of my service? Click here to read what they say. 
  • Interested to know what your house is worth? Click here to get the most extensive and accurate estimate of home value that is available on the Internet. No cost or obligation of course.
  • No doubt, the housing market is shifting, and it can be a confusing place right now. I suggest that we connect so that I can help you make confident and informed decisions about what’s happening. Minimize the fear or uncertainty that could change your plans. If you’re unsure about how to make sense of what’s going on in today’s housing market, text or call me at 484-574-4088 or go to my web site, (johnherreid.com) and lets set up a time to meet, either on line or in person. I have the software so that we can meet virtually and make the best use of your time.
  • If you’re looking to make that move up buy this year, I believe now is a good time to do it. The best way to ensure you’re up to date on the latest market insights is to partner with a trusted real estate advisor. Let’s connect. I would like to interview for the job of becoming your trusted real estate advisor.
  • One of the biggest benefits of owning a home, regardless of your income level, is that it provides financial stability and an avenue to build wealth. By selling your house and leveraging your equity, it can be easier to pay for your next home. Let’s connect to find out how much equity you have in your current home and how you can use it to fuel your next purchase.
  • If you would like to listen to our recent 14 minute podcast on this topic, please click on https://bit.ly/Leverage_Your_Equity_When_You_Sell_Your_House

HOW MUCH DO YOU NEED TO BUY THAT HOUSE? PROBABLY BE A LOT LESS THAN YOU THINK!!!

How Much do You Need To Save TO BUY THAT HOUSE? probably a lot less than you think.

Wondering How Much You Need To Save for a Down Payment? | MyKCM

First of all, lets define our terms. Down payment is what you will give your mortgage lender in order to qualify for the mortgage. Total money required to buy that house is more than that. Things like lender escrows, loan processing costs, seller reimbursement for taxes already paid, etc. raise the amount. But do not despair, my friends, the total is probably a lot less than you think.

If you’re getting ready to buy your first home, you’re likely focused on saving up for everything that purchase involves. One cost that’s likely top of mind is your down payment. But don’t let a common misconception about how much you need to save make the process harder than it could be.

Understand 20% Is NOT NEEDED TO BUY THAT HOUSE

Freddie Mac explains:

“. . . nearly a third of prospective homebuyers think they need available cash of 20% or more to buy a home. This myth remains one of the largest perceived barriers to achieving homeownership.”

Research that I have done with recent transactions tells me that if you want to minimize your cash outlay, you can probably get the deal done for about 8% of the purchase price. This means you could be closer to your homebuying dream than you realize. According to the National Association of Realtors (NAR), the median down payment hasn’t been over 20% since 2005. In fact, the median down payment today is only 14%. And it’s even lower for first-time homebuyers at just 6% (see graph below):

Wondering How Much You Need To Save for a Down Payment? | MyKCM

Learn About Options That Can Help You Toward Your Goal

If saving for a down payment still feels like a challenge, know that there’s help available. I would like to become your trusted  real estate professional who can show you options that could help you get closer to that home purchase you would like to make. According to latest Homeownership Program Index from Down Payment Resource, there are over 2,000 homebuyer assistance programs in the U.S., and the majority are intended to help with down payments.

Plus there are even loan types, like FHA loans, with down payments as low as 3.5%, as well as options like VA loans and USDA loans with no down payment requirements for qualified applicants.

To understand your options, please let me help you to do your homework.

NEXT STEPS FOR YOU:

Remember, you do not need a 20% down payment. If you want to purchase a home this year, let’s connect. I can also put you in touch with a trusted lender so you can explore all of your down payment options. Some of  these include gifts from others, first time buyer assistance programs, seller financing and others.

To get a quick update of what is new in real estate, click here to check out our new videos.

Interested in what recent clients think of my service? Click here to read what they say. 

Interested to know what your house is worth? Click here to get the most extensive and accurate estimate of home value that is available on the Internet. No cost or obligation of course.

No doubt, the housing market is shifting, and it can be a confusing place right now. I suggest that we connect so that I can help you make confident and informed decisions about what’s happening. Minimize the fear or uncertainty that could change your plans. If you’re unsure about how to make sense of what’s going on in today’s housing market, text or call me at 484-574-4088 or go to my web site, (johnherreid.com) and lets set up a time to meet, either on line or in person. I have the software so that we can meet virtually and make the best use of your time.