When you are paying on your mortgage, you are building up equity in your house. The equity in your home is figured by the current market value of your house minus the amount that is still owed on your mortgage. As your mortgage goes down, your equity goes up. There are things that you can do that will help you to increase your equity faster.
Pay More Of Your Principal
The principal of your mortgage is the money you borrowed. The interest is the fee you have to pay in order to borrow the money. Part of each of your payments goes toward paying down your principal and your interest. But, if you can afford it, you can pay an extra payment which will pay down your principal more. There are a couple of ways that you can do it. One is that you can take your normal payment amount and divide it by 12. Take that sum and add it to each of your payments. That will give you a 13th payment without having to break the bank. Another option is to make an actual 13th payment. With this payment, you can actually pay the same amount of your regular mortgage payment, or you can go for a larger or smaller amount. Make sure that it's an amount that you can afford.
Refinance Your Mortgage
If you notice that interests rates are falling, you can go to your mortgage company and ask to refinance your loan. If you have been paying regularly, you can ask for lower interest rates and a shorter period on your loan. Lower interest rates mean that you are not going to pay as much, and the shorter period means you will have your mortgage paid off that much faster.
Maintain Your House
Since equity is based on how much the current value of your house is, you want to make sure that the value stays high. The best way to do that is to make sure that you do the basic upkeep and that you repair any damage as soon as possible. Upkeep can mean cleaning the siding and inspecting the roof to make sure that there aren't any missing shingles that are falling off or are loose. Regular upkeep should also include things like checking out your furnace and air conditioners once a year to make sure that they are still working and inspecting your attic and crawl space to find leaks.
Equity allows you to do a lot of things. Building it quickly lets you get to those things faster.
