How To Use Your Home Equity to Buy Your Dream House

Hello everyone, this is Chad from Guild Mortgage in Worcester. Today, I'm here to share an insightful strategy for homeowners who have built substantial equity in their homes. Whether you bought a home with us 15 years ago or just five, this is an opportunity you don't want to miss.

Understanding Home Equity and its Potential

First, let’s touch base on what home equity is. It’s essentially the portion of your home that you actually own. As you pay down your mortgage, and as the value of your home rises, your equity increases. With the current market trends, you might have amassed significant equity. But how can you harness it to your advantage? Let’s find out.

Getting Pre-approved and Consolidating Debts

The first step in our strategy involves getting pre-approved. This means assessing your financial status and understanding what kind of loan you qualify for. One of the biggest advantages of this process is that it allows us to factor in your current debts. We’re talking about sizable amounts like $30,000, $50,000, or even more. By using the equity in your home, you can essentially earmark these debts to be cleared out when you buy your new home. This is done using the proceeds from the sale of your existing home. This step is vital as it eliminates a large burden of monthly payments.

Moving into a New Home with Minimal Down Payment

One of the appealing facets of this strategy is that you can transition into your new home with as little as a 5% down payment. Yes, this might result in a higher interest rate and balance on your new home loan. However, the removal of multiple debt payments can make this shift more financially feasible and potentially lower your total monthly payments.

Refinancing When the Time is Right

Now, let’s talk about the future. Interest rates fluctuate, and when they drop, refinancing can be a powerful tool. Refinancing involves replacing your existing loan with a new one, usually with a lower interest rate. This can lead to even more savings in the long run. At Guild Mortgage, we keep an eye on the rates for you and will reach out when it’s the right time to refinance.

Let’s Explore Your Options Together

If you find yourself in a home that no longer meets your desires or needs, and you wish to explore new horizons, let’s talk. We are more than happy to go through the options with you. This strategy has already proven to be highly beneficial for many of our past clients. Don’t hesitate to reach out to us. Have a great week, and we are here whenever you need us.