Three Ways to Build Equity in Your Home1) Use a mortgage calculators and see how adding a little payment to your principal here and there can shorten the length of your loan. The lower your principal gets, the more every payment from then on is applied to principal, as less goes to cover interest expense. Try rounding your payments up by as little as $25 or as much as doubling the principal payment or more.
(*before you make extra payments, read your contract and make sure you won't have to pay prepayment penalties.)
2) Biweekly payments take advantage of the fact that there are 52 weeks in the year and 12 months. If you pay half your regular mortgage payment every other week, you'll have made 26 half-payments, or the equivalent of 13 full monthly payments, at year's end. The extra annual payment can chop about six years off a 30-year mortgage.
Check if your bank will set up a biweekly payment plan. Some banks do it free; others charge. Ask the bank to credit extra payments toward principal so you save more on interest expense. Some banks set aside extra payments until the end of the year. *Do not pay a 3rd party to set this up for you when you can do it yourself!
3) Maintain your home. Sounds simple but it's important. Well maintained homes are worth more that identical homes that have deferred maintenance.
Everything from keep the caulk around your kitchen and bath fixtures in good repair to cleaning your furnace and changing the filters regularly will maintain and add value to your home.
Call or email today to get a checklist of items to do each season to help you cost effectively maintain your home and build up your value!
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