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Unlock Your Home's Potential: Smart Strategies To Build And Use Home Equity

Owning a home means building equity, which gives you a valuable resource for achieving your financial goals.

What is Your Equity?
Equity is the difference between what you owe on your mortgage (the principal) and what your home is currently worth. The simple math equation looks like this:

Current Value of Your Home - Principal Balance of Mortgage Loan = Equity

If your home is worth $800,000 and you owe $700,000 on your mortgage, you have $100,000 in equity.

Smart Ways to Build Home Equity
Every time you make your regular mortgage payment, you’re building equity. To accelerate the process, consider these steps: 

Pay Down Your Principal
If your budget allows, pay a little extra each month toward your principal. Options include making an extra lump-sum payment per year, switching to biweekly payments, or rounding up your payment.

Own Your Home Five Years or More
Staying in your home longer increases its value as the market fluctuates. Over time, you'll pay off more principal than interest, building more equity.

Renovate
Boost your home's value by keeping it in good repair and making strategic improvements. Enhancing curb appeal, opening floor plans, and upgrading kitchens and bathrooms offer the greatest return on investment.

How to Use Your Home Equity
Once you’ve built up equity, how can you use it? You could simply sell your home for a profit, or you can apply for a Home Equity Line of Credit (HELOC).

A HELOC works like a credit card, with your credit limit based on the equity in your home. As you repay the outstanding balance, your available credit is replenished. You also have the flexibility to draw as much or as little  as you need during the draw period. 

Benefits of Having a HELOC:
Competitive Rates: Benefit from lower rates compared to credit cards and personal loans
Flexible Funds: Access your credit limit anytime for both planned and unplanned expenses
Tax Benefits: Potentially deduct interest payments for extra savings*

Strategic Uses for Your HELOC:
Upgrade Your Home: Invest in renovations to boost your property’s value
Manage Debt: Consolidate high-interest debts efficiently
Create an Emergency Fund: Have a safety net for unforeseen expenses
Invest in Education: Finance educational goals at lower rates

Introductory rate
     6.49% APR
Fixed for 12 months*
‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾
As low as
8.50% APR
Thereafter

Whether your planning on renovations, consolidating debt, or preparing for unexpected expenses, seize this  special opportunity to achieve your financial goals with confidence.

Learn More!

Additional Resources

Home Equity Loans & Lines of Credit -10 minute module
Should I Refinance My Mortgage? -10 minute module
Considering Homeownership -6 minute module

*APR= Annual Percentage Rate. The initial rate for the Intro Rate Home Equity Line of Credit is a fixed rate not based on the index and margin used for subsequent rate adjustments. The initial rate of 6.49% APR is fixed for the first 12 months. After the introductory rate of 12 months the APR can vary and is based on Prime Rate plus a margin of 0.00% to +5.00% based on credit rating. The APR is subject to change on the 10th of each month, based on changes to Prime Rate, the highest Prime Rate published in the Wall Street Journal "Money Rates" table on the 20th of the prior month. Minimum APR 4.00%, maximum APR 18.00%. Intro Rate Home Equity Line of Credit up to 80% CLTV with loan amounts of $10,000 - $500,000. During the draw period, you may withdraw (advance) funds up to your credit line limit and pay interest accrued on that balance monthly. After the draw period, you may not withdraw any more funds from the line. Your loan is then amortized, and you begin to pay the principal and interest monthly. There are no early closure fees and no prepayment penalty. Borrower is responsible for closing costs ranging from $450 to $1,500 including appraisal and escrow. There are no loan processing fees for new HELOCs. Borrowers who would like to refinance an existing CommonWealth HELOC will be subject to a $500 loan processing fee. Rates, terms, and conditions are subject to change without notice. HELOC offer is available for existing CommonWealth members and to new members residing in the following counties in California: Alameda, Contra Costa, Merced, Monterey, San Benito, San Mateo, Santa Clara, and Santa Cruz. Consult a tax advisor regarding the deductibility of interest. NMLS ID #458544 

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