It is getting increasingly difficult to find your first foot on the property ladder. In fact the average Australian mortgage is now in excess of $500,000. But that doesn’t mean it’s impossible to get a property or build equity fast. You simply need to adopt the right approach. Building equity is crucial because when you get older you can make use of an equity release calculator to help you release cash from the sum of your home’s value, which can be vital in helping you out financially as you reach retirement.
Buy At The Right Price
The price you pay for a property in relation to what it is actually worth can make a big difference to the equity you build up. It’s a good idea to look at the properties for auction to get the best deals. Chris Scerri is an expert in the local property scene and can help you find a real bargain.
An auction property doesn’t need to be one that needs a lot of work. It could be people needing a quick sale or a foreclosure. In effect you could get a house for cheaper than it’s worth massively increasing your equity overnight.
Increase Your Down Payment
If you’re looking to access the equity in your home in the future then you may wish to consider putting a larger down payment on the property than you need to. This will instantly increase the amount of equity you have in the property meaning that equity release could help you build up a retirement fund.
You can also check the terms of your mortgage to find out if it is possible to pay lump sums off your mortgage. You can apply bonuses straight to your mortgage increasing your equity in the process.
Pay Over The Top
Instead of paying the amount set by your mortgage company you can pay a little more. This will reduce the life of your mortgage and increase the amount of equity you have in your home.
This is a great method if you don’t have a lot of disposable income. Once you’ve set up the payment it will just keep going; you’ll not even notice it but you will appreciate the benefit n the future.
One of the most obvious ways on increasing equity is to increase the value of your home. While this is possible through some home improvements, such as upgrading your kitchen or bathroom you need to be careful that the increase in value is more than what you have spent improving the rooms. If it isn’t you’ve just decreased your equity.
You can also look at adding to your property. A well done extension can make the house more practical, larger and worth a lot more money. Again you’ll need to be careful to keep to a budget that allows your equity to grow but this is a great option whether you’re planning to sell or stay for the long term.
Owning your own home is a great feeling and with a practical approach you can quickly increase your equity. This will allow you to invest in more properties and build a portfolio which could see you having a very comfortable retirement.
But, as always, property prices can go down; you must factor this into your equations.