The Grimm Group: Home Equity at an All Time High
The pandemic has had a significant impact on the housing market, leading to a surge in home equity for many homeowners. This increase in home equity has created new opportunities for homeowners to leverage their wealth and achieve their financial goals.
Why is Home Equity on the Rise?
Several factors have contributed to the recent surge in home equity:
Low Interest Rates: Low interest rates during the COVID era made it more affordable for homebuyers to purchase larger more expensive homes, which lead to an unprecedented rise in home values as bidding wars became common in many of the hottest markets.
Strong Demand: The pandemic led to a surge in demand for housing, as many people have been working from home and looking for more space. This increased demand has driven up home prices, which has also increased home equity.
Limited Supply: The supply of homes for sale has been limited going back to The Great Recession of 2008, where home builders under built for over a decade which has also helped to drive up home prices and increase home equity.
LockIn Effect: Moreover with a recent rise in interest rates, there is a lock in effect occurring where many homeowners have interest rates substantially lower than current rates making it unlikely that they will want to put their home on the market thus trading their current interest rate for one much higher.
How Can You Leverage Your Home Equity?
There are several traditional ways to leverage your home equity:
Refinance Your Mortgage: Refinancing your mortgage can help you lower your monthly payments, consolidate debt, or access cash for other purposes.
Home Equity Line of Credit (HELOC): A HELOC is a type of revolving line of credit that allows you to borrow against your home equity. This can be a useful tool for financing home improvements, paying for college tuition, or consolidating debt.
Cash-Out Refinance: A cash-out refinance allows you to refinance your mortgage for more than you owe on your home, giving you access to the equity you've built up.
The problem with all of these methods is that they all involve you taking out loans or refinancing at much higher interest rates than you currently have. This very problem is the reason we created and patented the Home Equity Brokerage Account (HEBA) which allows homeowners to invest the equity in your home through a professionally managed brokerage account and earn a market return while still maintaining all of their home ownership as well as continued real estate appreciation.
Working with The Grimm Group
At The Grimm Group, we can help you understand your home equity and develop a strategy for leveraging it to achieve your financial goals.
Contact us today to schedule a consultation.
Disclaimer: Investing involves risks, and you may lose money on your investment. It is important to consult with a financial advisor before making any investment decisions.