With the constantly changing mortgage market, your home can be an excellent source of funds for your next home project.

Being a homeowner is a great way to build wealth and growing equity is key to success.

U.S. homeowners with mortgages have seen a significant increase in their equity within the last two years.

According to data provided by CoreLogic, these homeowners have amassed nearly $3 trillion in equity growth since the second quarter of 2020 — up 29.3% year over year.

In September 2021, the median existing home price was $352,800; in September 2021, according to the National Association of Realtors, a 13.3% increase year over year.

Opening up an untapped option to pull from their current home equity through a home equity loan, line of credit or a cash-out refinance.

What is home equity?

Home equity is the current value of your home, subtracting the balance owed. If you recently had an increase in your home value based on the current market, your home equity available would have increased.

Your home equity not only grows with the increase in market value but by making payments on the principal balance of your mortgage.

Building equity can be a long process, as it is similar to investing. While making payments on your mortgage, you are investing in building your personal wealth.

While some funds are untouchable, financial institutes will cap the amount they will allow you to pull out up to 80%-85% of your equity.

The best way to get a true visualization of your home would be to get an appraisal of your current home.

Some homeowners choose to use their home equity line for more upfront expenses like medical and educational bills, debt consolidation, or a new vehicle purchase.

This can be a great alternative as credit card percentages can be significantly higher than a home equity line of credit.

Using your built-up equity to invest back into your home is a great way to increase your property value.

Whether you have a growing family and need an addition or are looking to update an outdated space like, kitchen or bathroom, small renovations can sometimes make a significant difference.

Keeping focus on improvements that will actually increase your home value vs. projects that future buyers may see as a safety risk or too much maintenance, like a pool.

Start opening up the conversation with a trusted builder, like Alair, who will help walk you through every step of the remodeling process.

What key components will bring out the best value within your space as well as make your home more functional for those who currently live there. 

Remodeling your home is also a great way to stay within your current space for a longer period of time.

Create a space that fits within your everyday and entertaining needs.

Attom Data Solution started tracking the length of homeownership in 2000, showing people lived in their homes for more than eight years before selling in 2020 vs. during the recession, with an average homeownership length of a little over four years.

So whether you are looking to buy or remodel, there may be some opportunities that you haven’t been looking at and can dig deeper into before taking the leap on selling.

While the home equity conversation isn’t a secret, it can definitely open doors on much larger projects that you may not have been envisioning.