Buy Second Home in Old Metairie: Strategies for Growing Equity Part 2
Are you ready to buy a second home in Old Metairie? It could be a good investment. But what can you do to help the equity grow? Read on for a few tips to increase equity in your Old Metairie home.
This post is part two of a series. Click here to see the tips in part one.
Old Metairie Real Estate Market Watch
As of July 2023, the median price per square foot of homes in Old Metairie was $271. However, real estate trends are always changing. If you need help buying a home in Old Metairie, click here to contact us.
Growing Equity When Buying a Second Home in Old Metairie
Increase Your Mortgage Payments
Paying extra on your mortgage is a smart way to grow equity faster. When you pay extra, you can put more toward the principal. The more you pay toward the principal, the faster your equity will grow. You don’t even have to pay extra every month; just do it when you can.
Avoid Mortgage Insurance if Possible
In most cases, private mortgage insurance (PMI) protects lenders rather than homeowners. Another point is that the insurance payment reduces the amount you pay toward the principal. One way to avoid needing mortgage insurance is to make a down payment of at least 20%. With no PMI in your monthly payment, you can afford to pay more of the mortgage off each month.
Pay Closing Costs Out-of-Pocket
Many buyers choose to roll their closing costs into the mortgage. It sounds tempting because you don’t need to pay upfront. However, it adds to the debt you owe on the house. That means it will reduce your overall equity in the property.
Avoid Cash-Out Refinancing
Cash-out refinancing lets you borrow money using your home’s equity. You’re essentially paying your old mortgage with a new one and taking the remaining cash. While it can be a way to access loans at lower interest, it can also reduce your home equity. It might even make it harder to sell the home.
Let the Value Increase Over Time
Most homes grow in value over time. As long as you are patient, the property value will increase. As the property value increases, your home equity will grow as well. It is especially true in places where the housing market is stable.
Billy Borrouso New Orleans Real Estate
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