Six Tips on Building Equity in Your Home

- Before purchasing a new home, consider adding more to the down payment. This simple action creates equity by reducing the amount of your mortgage loan. 

- The smaller the loan term, the faster the loan is paid off. Your payments will be higher, but if it is affordable, it is a fantastic way to gain equity quickly. 

- Every monthly payment you pay towards your mortgage automatically builds equity unless your mortgage is an interest-only loan. Discuss this with your lender before you begin because you want to be certain that you are paying down the principal. 

- Adding to your payment each month not only builds the equity, but it will save money on interest in the long-term. 

- Consider dividing your monthly payment into two payments every other week. This plan makes it easier for you to squeeze in one extra payment per year. (26 half-payments=13 monthly payments) 

- Less expensive ways to pay the principal down sooner:  round up your monthly payment, budget a smaller amount each month to be paid on your loan, or use a tax refund or work bonuses to pay towards the principal. 

- Properly maintaining your home will at least keep up the value, depending on the market, of course. Roof leaking? Repair it. Paint peeling? Grab a paintbrush. Sweat equity does not cost you anything, but if you must, hire a pro so that the job is done right. 

- Adding value to your home is possible, but only if you are not spending too much out-of-pocket or dipping into a home equity loan to make the upgrades. 

- Refinance your mortgage only if it is necessary or if you are decreasing the loan term.