8 Tips For Building Equity In A Home

Feb 13, 2025

6-minute read

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When people say a house is an investment, they’re usually talking about home equity. Building equity in a home is a good thing since it allows you to increase your wealth without the funds on hand. 

Read on to learn how to build equity in your home and ways you can use it.

What Does It Mean To Build Home Equity?

Home equity is the dollar amount of your home that you own. It’s the difference between the value of your home and the amount of money you owe on your mortgage.

For example, if the value of your home is $200,000 and you owe $150,000, your equity is $50,000.

When you build equity, it means that you increase the difference between your home value and the amount you owe on your mortgage. You can do that by increasing your home’s value or decreasing the amount of money you owe on your mortgage.

For example, if you made extra mortgage payments on your $200,000 home and you now owed $145,000, you would have $55,000 in equity. You increased your equity by $5,000.

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