Skip to main content

Mainstreet Credit Union, Lenexa, KS

  • Accounts & Services
    • Savings
    • Checking
    • Investments
    • Youth Accounts
    • ATM/Debit Card
    • Mobile & Online
    • Visa Gift & Reload Cards
    • Other Services
    • Rates
  • Loans
    • Vehicle Loans
    • Personal Loans
    • Student Loans
    • Credit Cards
    • Home Loans
    • Rates
  • Resource Center
    • My Mortgage
    • My MasterCard®
    • Reorder Checks
    • Advice
    • Auto Avenue
    • Financial Calculators
    • FAQs
    • Other Useful Links
  • Discover Mainstreet
    • About Us
    • Join Us
    • Careers
    • Community
    • The Credit Union Difference
    • Mainstreet Talk
    • Annual Report
    • Locations/ATMs & Hours
    • Contact Us









Routing Number: 301079183

Advice

  • Credit and Debt
    • Credit
    • Debt
  • Money Management
    • Banking
    • Budgeting
    • Saving
    • Spending
  • Family Finances
    • Life Events
    • Insurance
    • Identity Protection
    • Kids & Money
    • Financial Crisis
  • Workplace Finances
    • Employee Benefits
    • Paycheck Planning
    • Retirement Plans
  • Home Ownership
    • Buying a Home
    • Mortgage
    • Home Equity
    • Refinancing
  • Paying for College
    • Saving for College
    • Financing College
    • Repaying Student Loans
  • Retirement Planning
    • Saving for Retirement
    • Social Security
    • Living in Retirement

Building Equity in Your Home

Building Equity in Your Home

If you own a home, the mortgage payments you make each month could help you build a substantial asset - home equity. The home equity you build represents how much of your home you own, which can grow with time.

What Is Home Equity?

Equity is how much of your house you actually own after you account for debt. To calculate this value, you will need to subtract your loan's balance from your home's market value. If you come up with a negative number, your house is worth less than what you owe, and you end up with negative equity. Having equity is valuable. It enables you to:

  • Borrow money against it through a home equity line of credit or a home equity loan.
  • Receive cash once you sell your house and pay all related costs.
  • Use it to pay the down payment on the next house you buy.

How to Build Equity in Your Home

There are ways to build up your home's equity, including:

  1. Make a Large Down Payment

    Making a bigger down payment when you purchase a home allows you to gain equity right from the start. It is instant equity. For a bonus, when you put 20% or more of your property's value down, you avoid costly private mortgage insurance.
  2. Pay More Money on Your Mortgage


    If you choose to add to your monthly mortgage payment each month, ensure the money you are adding will apply to the mortgage principal. Ask the lender of your mortgage how you can do that and keep an eye on your monthly mortgage statements to ensure the money is being credited accurately. There are several ways of paying more regularly:

    • Add more money to your monthly payment. Ensure it is a high enough amount that will make a difference but doesn't harm your budget.
    • Change to making mortgage payments biweekly. Instead of paying monthly on your mortgage, pay biweekly. This will add on an extra monthly payment annually to your mortgage.
    • Schedule additional automatic payments with your bank or credit union to apply to the mortgage at regular intervals.
  3. Enhance the Property

    Some home improvements, remodeling, and curb appeal projects can boost the equity of your home. Smaller projects, such as replacing a front entry door or garage door or adding attic insulation, do better at increasing your home's equity, particularly if you pay with cash rather than through a loan.

    Other things you can do to improve your property's value involve enhancing your home's energy efficiency. For instance, you can install double-paned windows, switch to LED lighting, upgrade to energy-efficient appliances, and add solar panels. Even smaller upgrades, like adding a smart thermostat, can appeal to energy-conscious buyers.
    Of course, modern bathrooms and kitchens are sought after, as are finished basements and decks.

How Does Building Home Equity Help Me?

Building equity in your home could be a long-term wealth-building strategy. Making your monthly payments decrease the amount you owe, therefore making payments on your home is often referred to as "a forced savings account." This is different than almost all other assets bought with a loan, like vehicles, which lose their value as you're paying them off.

Takeaway

It can take some time to build equity, but it is worth it. After you have built up enough equity, you can turn around and draw from it through a home equity credit line or home equity loan. Boosting your property's value, making a larger down payment, and paying more on your mortgage each month are only some ways of growing your equity.

Copyright

Related Content

Article

Home Equity Loans vs Lines of Credit
What Now for Home Equity?
Understanding Home Equity
Building Equity in Your Home
Cash-Out Refinancing or a Home Equity Loan?
Are Home Improvement Projects Worth The Effort?

Financial Quiz

Using the Equity in Your Home

Financial Tool

Calculate a Home Equity Loan Payment
Calculate a Home Equity Line of Credit Payment
The Equity in Your Home
Paying Off a Home Equity Loan or Line of Credit
Using Home Equity for a Major Purchase
Consolidating Debt with Home Equity
Home Equity Loan or Line of Credit?

Poll

Has the value of your home increased or decreased in the last 6 months?
How have you used the equity in your home?
How much equity do you have in your home?
Is your home worth more or less than your outstanding loan balance?

Mainstreet Credit Union, Lenexa, KS


  • Careers
  • Security
  • Privacy & Disclosures
  • NMLS Lender ID#: 465931




©

Mainstreet Credit Union.

Equal Housing Lender


You will be linking to another website not owned or operated by Mainstreet CU. Mainstreet CU is not responsible for the availability or content of this website and does not represent either the linked website or you, should you enter into a transaction. We encourage you to review their privacy and security policies which may differ from Mainstreet CU.