For many homeowners in Somerset and across the UK, home equity is one of their most valuable financial assets. Whether you're looking to remortgage, release equity, or simply understand your property's financial potential, knowing how home equity works can help you make informed decisions.
What is Home Equity?
Home equity is the portion of your property that you truly own, its current market value minus any outstanding mortgage balance. As you pay off your mortgage or if your property increases in value, your home equity grows.
For example, if your home is worth £300,000 and your remaining mortgage balance is £150,000, your equity is £150,000.
How Can You Increase Your Home Equity?
Building home equity can benefit you in the long run, providing financial security and borrowing power. Here are a few ways to increase it:
-
Making Overpayments – If your mortgage allows it, overpaying each month can help reduce the principal balance quicker, increasing your equity.
-
Home Improvements – Renovating your kitchen, adding an extension, or improving energy efficiency can boost your property’s value.
-
Market Growth – If property prices rise in Somerset and the South West, your home’s value may increase naturally, enhancing your equity.
-
Shorter Mortgage Terms – Opting for a shorter-term mortgage (if financially viable) reduces interest payments and builds equity faster.
Ways to Use Your Home Equity
Homeowners in Yeovil and the surrounding areas often explore different ways to access their home equity. Here are some options:
-
Remortgaging – Switching to a new mortgage deal may allow you to borrow more against your equity, potentially at a lower interest rate.
-
Equity Release – If you're aged 55 or over, an equity release plan can provide tax-free cash without the need to move.
-
Secured Loans – Using your home as security, you may be able to borrow funds for major expenses like home renovations or debt consolidation.
Is Accessing Your Equity the Right Move?
Using home equity can be a great financial tool, but it’s essential to assess your options carefully. Speaking to a qualified mortgage advisor, like Roff Financial, ensures you make the best decision based on your personal circumstances.
Need Mortgage or Equity Advice in Somerset?
At Roff Financial, we provide honest, friendly advice on mortgages and equity release. Whether you’re in Yeovil or elsewhere in the South West, we’re here to help you navigate your financial journey with confidence.
Contact us today to explore your home equity options and discover how you can make the most of your property’s value.
Add comment
Comments