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What is home equity?

By James Brown

Taking out a home loan and purchasing Caboolture real estate has an added benefit for property owners in the form of home equity, which could be a wonderful bonus to the already great feeling of owning your own property. Acting as a source of wealth, home equity can be used to help you achieve future investment goals and further grow your property portfolio with ease. 

What is home equity?

When you start making repayments on your mortgage, your home equity is the difference between the value of the property and how much you have left to pay. This amount increases as you make repayments and the value of the property increases, turning your home into a major asset.

After building a substantial amount of wealth in your property, it's possible to refinance your home loan and access these funds for your own needs. Acting as a line of credit, using the equity built up in your property means you can put this money towards anything you need – including the deposit on an investment property. 

This is a common use of home equity and can be a brilliant way to begin moving up the property ladder. Of course, it's always important to ensure you can make the necessary repayments before committing to this – using your house as security means putting your livelihood on the line. 

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