Leveraging Your Home Equity to Ease Money Worries and (Better Yet!) Build Wealth

The Lighter Side of Real Estate • January 11, 2024

When you’re worried about money, it can feel like you’re the only person in the world who’s struggling to figure out how to pay for things. So it may come as a relief to find out that you’re not alone if you’ve got money on your mind.

In fact, a recent survey of 2,000 people with less than 2 months worth of liquid assets revealed that 77% of them felt like they carried the mental and emotional weight of the finances in their household alone, and spent an average of 19 days worrying about money per year. About 25% of those surveyed said they devote a full week each month on budgeting, checking their bank account balance, and reviewing their credit card transactions.

It may not make it any easier when you’re dealing with the stress, but at least you know it isn’t a unique situation.

However, if you own a home, the past few years have probably put you in a position to worry a bit less, and maybe even put you in a better financial position in life moving forward.

How to Tap Into the Hidden Financial Potential in Your Home

Home values have risen substantially in many areas over the past few years. Even if you haven’t done any major improvements to your house, the chances are your equity has grown considerably, which means you have some potential money that could be put to good use.

Your equity is the difference between the amount your house is currently worth, and the amount you owe to any lenders.

For example, if you owed $240,000 (which is about the average mortgage balance per household according to Bankrate), and your house was worth $513,000 (which is the approximate average home price in the US according to Federal Reserve Economic Data), you’d have $273,000 worth of equity.

Unfortunately, that money isn’t real until and unless you monetize it. Other than selling your house, there are two basic ways to do that:

  • Do a cash-out refinance. This means you would take out a new loan on your house for more money than you currently owe, paying off the balance of the existing loan, and pocketing the difference between the new loan and existing loan you paid off.
  • Take out a home equity line of credit (HELOC). This is a revolving line of credit using the equity of your home as collateral.

In both approaches, lenders will typically allow you to borrow up to 80% of your equity. Using the above numbers as an example, if you refinanced your house with a $300,000 mortgage, you would free up about $60,000. Or you could take out an equity line of credit for $60,000 so you keep your existing mortgage rate if it’s one you want to keep.

That $60,000 is money you could use as breathing room to feel less stress over the what-if’s in life, like unexpected expenses, or, better yet, to improve your financial situation by using it strategically to make more money.

Just Make Sure to Use It Wisely…

No matter which way you tap into existing home equity, you’re going to have to pay that money back because they’re loans against the current value of your house. So, while just freeing up some cash to give you peace of mind and less stress is certainly helpful, using that money to make more money is the ideal way to put it to use.

This article from CBS News listed 5 smart ways to use your home equity in 2024, such as:

  • Use it to increase the value of your home even more. Doing some renovations or improvements that increase the value of your home can be a great use of equity. Just make sure to make strategic choices that will actually have a positive return on your investment by asking your preferred real estate agent for advice on the improvements that’ll give you the most bang for your buck.
  • Pay down higher interest debts. If you have credit card debts that are difficult to pay down, using your equity to get rid of those high interest payments can be a great way to clean the slate. Just make sure you don’t go right back to using those credit cards and accrue more debt again, and use the money you aren’t paying towards paying down those credit cards to start saving some money for emergencies, retirement, and a monthly safety net.
  • Invest in education. Whether it’s for you or your children, advancing earning potential by investing in education can be a useful way to use your equity. Just make sure the prospects for jobs in the field of study will be worth the cost of the education, and then some! (Also, weigh whether simply taking out student loans would be less risky, or more cost effective than using your equity.)
  • Buy more real estate. Using the equity in your current home to buy an investment property that provides you with positive cash flow is a great way to add to your wealth by having another property that you’re building even more equity with. Just make sure to work with your preferred real estate agent closely and buy a place that will produce enough income to cover the mortgage and expenses, and ideally some extra cash you can pocket per month.

While monetizing the equity you’ve gained can certainly make life easier, less stressful, and even financially better, just remember to be thoughtful about how much equity you take out — especially if you plan on selling in the next few years. Home values are still currently at all-time highs in many areas, and look to remain strong, but they can also drop depending upon how the market plays out. So leave yourself a good amount of equity in your home to stay safe.

Also, make sure you can afford to pay the money back on a monthly basis, and you aren’t just adding more debt that you’ll have to pay off and worry about. Ideally, use it for good reasons that make sense financially, and not to take a trip to a resort or or go on shopping sprees.

The Takeaway:

If you find yourself worrying about money being tight each month, you’re not alone. In fact, a recent survey revealed that 77% of people with less than 2 months worth of liquid assets felt like they carried the mental and emotional weight of the finances in their household alone, and spent an average of 19 days worrying about money per year.

But if you own a home, you may have equity you can tap into that will ease the monthly stress by freeing up some of the cash tied up in your home’s value by doing a cash-out refinance, or taking out a home equity line of credit. Better yet, if you invest it wisely you can use it to improve your finances! Just don’t tap into your equity for frivolous expenses, or take on more debt than you can comfortably handle.

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The 3 Things You Risk by Pricing Too High

By KCM • August 8, 2025
The 3 Things You Risk by Pricing Too High When selling your house, the price you choose isn’t just a number, it's a strategy . And in today’s market, that strategy needs to be sharp. The number of homes for sale is climbing. And that means buyers have more choices and can be more selective. If your price doesn’t line up with what else is out there, they’ll scroll right past it and go on to the next one. Pricing right from the start is your best move – and a great agent can help make sure you do. Overpricing Comes at a Cost And more sellers are finding that out the hard way. They list their house based on how things were a year ago – or based on a neighbor’s sale that happened under completely different circumstances. Then, when their house doesn’t sell, they’re left with three tough choices: Drop the price : Cutting the price might help get more eyes on the house again, but it can also trigger red flags. Buyers may wonder what’s wrong with it. And that’s going to impact any offers you get after the price cut. Take it off the market : Some sellers give up on the idea of selling right now. The worst part about this is it means putting their future plans on the back burner. That dream of more space, downsizing, or relocating? On pause. Rent it out : Others go the landlord route, but managing tenants and navigating leases isn’t always the simple fallback it seems. Renting can work, but it’s often a lot more hassle than people expect. None of those options were part of the original plan. And honestly, none of them are where you should end up if you wanted to sell. Here’s a look at how a local agent’s expertise can help you avoid these headaches. Let's use price cuts as an example. Where You Live Makes a Difference While the number of price cuts is up nationally, data shows some parts of the country are seeing far more of them than others. It all comes down to how much inventory has grown in that area (see map below): As Realtor.com explains : “Regionally, price reductions in June were significantly more common in the South and West (23% of listings) than they were in the Northeast (13% of listings), reflecting the inventory divergence across these regions.” That means pricing isn’t one-size-fits-all. What’s happening nationally might not reflect what’s happening in your zip code, and that’s why you shouldn’t try to determine your list price on your own. How a Great Agent Helps You Nail the Price A skilled agent doesn’t just toss out a number. As Zillow says: “ Well-priced homes are more likely to sell quickly, but pricing your home to sell quickly and for maximum dollar requires strategy and knowledge of your local market. You need to have a clear-eyed view of your home in relation to the competition, and knowledge about whether you’re in a buyers or sellers market. It also helps to know what buyers in your area can afford.” And that’s all knowledge your agent will have. They study your local market, compare recent sales, and factor in your goals and buyer behavior. Based on what’s happening where you live, sometimes the best play will be pricing right at current market value. Other times pricing a little lower actually will spark more offers and ultimately get you a better final sale price. So don’t skimp on the strategy or on your agent. With their local market know-how, you’ll be able to sell quickly, even in a shifting market. Bottom Line Overpricing can lead to tough choices you never want to face. But with the right price, and the right guidance, you can skip the stress and sell with confidence. Let’s connect so you have a pricing strategy that works for today’s market and gets you where you want to go.

What You Can Gain — Or Lose — Selling Your Home to an iBuyer

By Trending Homes • August 6, 2025
What You Can Gain — Or Lose — Selling Your Home to an iBuyer An iBuyer can help you to sell your house quickly by skipping some of the hassles of having a home on the market and letting you set your own timeline. But selling to an iBuyer — a real estate company that uses tech to buy and resell houses — isn’t for everyone. Not all homes will qualify, even if you live in an area where iBuyers operate. And while you can be sure that the sale will go through because there’s no mortgage involved, you won’t know whether you could have gotten a higher price for your home from a traditional buyer. Here are some pros and cons to consider before selling your home to an iBuyer. Pros of selling your home to an iBuyer Convenience Not having to prepare your home for sale or make it available for potential buyers can be a huge plus for sellers. “That’s something that’s hard to place dollar values on too, like getting your kids and dog out the door to facilitate home showings,” says Charles Stewart, who’s in corporate communications for Opendoor. “It’s not just the final dollar amount you’re getting, it’s the convenience factor.” Timing In a buyer’s market, the need to sell quickly can work against you. If a traditional buyer finds out you’re in a hurry, they could use that as leverage to make a lower offer. But with an iBuyer, it’s expected that the process will be fast. Though you can always request a new offer, iBuyers’ initial offers are usually valid for less than a week. An iBuyer can also help with timing in a hot real estate market . If you’re concerned about finding a new place, you can choose a closing date that’s further out (depending on the iBuyer, it can be as distant as 90 days). You may also be able to rent back your house after the iBuyer purchases it, buying you a bit more time. Predictability With an iBuyer, you know exactly when things will happen since you set the closing date and you don’t have to worry about the mortgage financing falling through at the last minute. “People who are moving across the country trying to time their move to the sale of their house, it’s next to impossible,” says Amanda Pendleton, communications manager for Zillow. With an iBuyer, you’ll know exactly when to hire the movers. Cons of selling your home to an iBuyer Qualifications Not only do you need to be in a market where iBuyers operate, but you also need to have they kind of home they’re looking for. Houses that need extensive repairs are out, but so are higher-end homes, houses that are highly customized and most older homes. “Each market has its own set of parameters,” says Tyler Hixson, director of real estate partnerships and strategy at Opendoor. “Whatever is the typical home for that market, the typical home is one that we can service.” Broadly, houses, condos, and townhomes that are relatively new are the most likely to fit the iBuyer model. Opportunity cost Since iBuyers are still relatively new, robust data on what they’re paying for homes is hard to come by. Studies have conflicting evidence, with some finding that iBuyer offers are close to market value, and others demonstrating wider gaps. Both Zillow Offers and Opendoor emphasize that they offer “fair market prices” based on both computer algorithms and human analysis (iBuyers do have actual boots on the ground in the markets where they operate). But since you’re dealing with a what-if scenario, you can’t truly know whether you would have gotten a better price by selling your house the traditional way. Repairs After you’ve agreed to an iBuyer’s offer, the iBuyer does an assessment (this is similar to, though not the same as, a home inspection). The assessment is designed to uncover things the iBuyer might need to repair or replace in order to sell your house . Though you can negotiate to do the repairs yourself, that may not be an option if you’re in a hurry to move. If the iBuyer does the repairs, the costs will be deducted from what they pay you, meaning the assessment could end up taking a big bite out of your original offer. Weighing the pros and cons of selling to an iBuyer Determining whether your property fits an iBuyer’s qualifications is a first, necessary hurdle. If it does, and you’re curious as to whether to take the next step, bear in mind that many iBuyers will give you an offer without requiring a commitment. You may be able to request offers from more than one iBuyer, depending on where you live. iBuyers generally make limited-time offers (you’ll usually have less than a week to accept), but seeing an actual number might give you a nudge to move forward. On the other hand, it could tip your hand toward going the traditional route and looking for a listing agent. Either way, you’ll need to decide what’s worth more to you. Don’t want to deal with prepping your house to sell and making your schedule work around showings? An iBuyer might be right for you. More concerned with maximizing your profit? Getting a savvy seller’s agent and doing a traditional sale may be a better bet. The article What You Can Gain — Or Lose — Selling Your Home to an iBuyer originally appeared on NerdWallet.

What Credit Score Do You Really Need To Buy a Home?

By KCM • August 4, 2025
What Credit Score Do You Really Need To Buy a Home? According to Fannie Mae , 90% of buyers don’t actually know what credit score lenders are looking for, or they overestimate the minimum needed. Let that sink in. That means most homebuyers think they need better credit than they actually do – and maybe you’re one of them. And that could make you think buying a home is out of reach for you right now, even if that’s not necessarily true. So, let’s look at what the data really says about credit scores and homebuying. There’s No One Magic Number There’s no universal credit score you absolutely have to have when buying a home. And that means there’s more flexibility than most people realize. Check out this graph showing the median credit scores recent buyers had among different home loan types: Here's what’s important to realize. The numbers vary, and there’s no one-size-fits-all threshold. And that could open doors you thought were closed for you. The best way to learn more is to talk to a trusted lender. As FICO explains : “While many lenders use credit scores like FICO Scores to help them make lending decisions, each lender has its own strategy, including the level of risk it finds acceptable. There is no single ‘cutoff score’ used by all lenders, and there are many additional factors that lenders may use . . .” Why Your Score Still Matters When you buy a home, lenders use your credit score to get a sense of how reliable you are with money. They want to see if you typically make payments on time, pay back debts, and more. Your score can impact which loan types you may qualify for, the terms on those loans, and even your mortgage rate. And since mortgage rates are a big factor in how much house you’ll be able to afford, that may make your score feel even more important today. As Bankrate says: “Your credit score is one of the most important factors lenders consider when you apply for a mortgage. Not just to qualify for the loan itself, but for the conditions: Typically, the higher your score, the lower the interest rates and better terms you’ll qualify for .” That still doesn’t mean your credit has to be perfect. Even if your credit score isn’t as high as you’d like, you may still be able to get a home loan. Want To Boost Your Score? Start Here And if you talk to a lender and decide you want to improve your score (and hopefully your loan type and terms too), here are a few smart moves according to the Federal Reserve Board: Pay Your Bills on Time: This is a big one. Lenders want to see you can reliably pay your bills on time. This includes everything from credit cards to utilities and cell phone bills. Consistent, on-time payments show you’re a responsible borrower. Pay Down Your Debt : When it comes to your available credit amount, the less you’re using, the better. Focus on keeping this number as low as possible. That makes you a lower-risk borrower in the eyes of lenders – making them more likely to approve a loan with better terms. Review Your Credit Report : Get copies of your credit report and work to correct any errors you find. This can help improve your score. Don’t Open New Accounts : While it might be tempting to open more credit cards to build your score, it’s best to hold off. Too many new credit applications can lead to hard inquiries on your report, which can temporarily lower your score. Bottom Line Your credit score doesn’t have to be perfect to qualify for a home loan. But a better score can help you get better terms on your home loan. The best way to know where you stand and your options for a mortgage is to connect with a trusted lender.​
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