Smart Savings: 7 Ways to Build Your Home Equity Faster

by Kacey BradleyFebruary 20, 2019

Finding and buying the right home is only half of the property-ownership battle – you’ll want to build equity through your purchase, too. Simply put, home equity is the difference between the market value of your home and the amount you owe on your loan for it. If that number is positive, then you’ve gained some equity in your purchase.

Home equity is a highly sought commodity because it can come in handy in a multitude of ways. With a guaranteed profit in selling your home, you can take out a loan in the value of your equity and use it toward unexpected expenses, college, home upgrades, etc. In other words, it’s a great safety net provided by home ownership, so long as you work to build it up.

Luxury House

To that end, it takes smart savings, payments, and investments to maximize the amount of equity you can make from your home. Want to build that number even faster? Here are seven ways to speed up the process.

1. Put More Toward Your Mortgage

Once you sign on the dotted line, hand over the down payment and receive your keys, you’re officially a homeowner. And with that title comes the responsibility of paying your mortgage every month. That money, too, boosts your home equity, although you’ll undoubtedly chip away at what you owe at a slow pace. Speed things up by putting more toward your mortgage each month.

How you choose to increase your mortgage payment each month is up to you. Some might round up the bill, so they pay $1100 toward a $950 mortgage payment for that extra jump in equity. You could also reconfigure your payments so that you pay biweekly instead of monthly. That way, you end up making 26 payments over the course of a year, rather than 12.

No matter how you plan to increase your payments, funnel your cash toward the mortgage principal, rather than the interest. The principal is the amount you took out to pay for the house, and this figure collects interest. Pay it down first to reduce the amount of additional money you have to put toward the property.

2. Funnel Leftovers into the Mortgage

You know what your monthly salary will be each month, but you can’t be sure when you’ll receive a bonus or a gift. When you receive an unexpected sum of cash, use it to your equity advantage – put it toward the mortgage, too. And, if you have the chance to work overtime or otherwise add money to your paycheck, do so with the intention of putting the difference into your mortgage payment too.

3. Replace the Garage Door

Of course, another way to build equity in your home it to renovate and upgrade the property to increase its value, thus boosting the amount you stand to earn by its sale. One of the most lucrative projects to take on is a garage-door replacement. This simple task can add up to 83 percent of its cost to the overall value of your home once completed – more than you’d get from a long, pricy and potentially burdensome kitchen renovation. Keep it simple, and you’ll reap your rewards quickly.


4. Live Off a Single Salary

Sharing the mortgage with a partner means you can quickly build equity in yet another way – by earmarking one of your salaries for house payments only. Yes, this might mean you live somewhat frugally for an extended period, but the reward at the end of your mortgage will be pretty sweet. Again, you’ll likely pay much less interest on your loan, since you’ll pay it down much more quickly and substantially by dedicating an entire salary to it.

5. Make a Sizable Down Payment

As previously mentioned, you can calculate your home’s equity by subtracting what you’ve paid on your house from its market value. Obviously, you’ll include the down payment in this figure – it’s part of your initial investment in the place, after all. And, if you put down a more significant chunk of money than what’s required to secure your new abode, you’ll instantly have more equity. This course of action can end up saving you money in the long run, too, since smaller down payments will require you to pay for private mortgage insurance on top of your monthly house payments.

6. Restructure Your Mortgage

If you signed up for a 30-year mortgage, you can hasten up the equity-building process by switching it to a 15-year plan. This means your monthly payment will increase, but there’s a silver lining – you’ll pay much less interest over time since you pay off your mortgage more quickly than planned. In terms of smart financial choices, this one’s a one-two punch.

7. Remain Patient

Finally, much of your home’s equity depends on the market. In other words, no matter how much you put toward your mortgage, the property value depends on how in-demand homes are and what buyers want to spend. So, remain patient – prices may fall, but they’re bound to rise again. And, as they do, you’ll quickly build equity, just as you planned all along.

Start Boosting Your Home’s Equity

How will you boost your home’s equity? There’s no one-size-fits-all answer, but there are plenty of ways to do it. Figure out what works for you, pursue it and see how great it feels as your property’s value creeps higher and higher and higher…

Shares 0
About The Author
Kacey Bradley
Kacey Bradley is the lifestyle and travel blogger for The Drifter Collective, an eclectic lifestyle blog that expresses various forms of style through the influence of culture and the world around us. Kacey graduated with a degree in Communications while working for a lifestyle magazine. She has been able to fully embrace herself with the knowledge of nature, the power of exploring other locations and cultures, all while portraying her love for the world around her through her visually pleasing, culturally embracing and inspiring posts. Along with writing for her blog, she has written for sites like U.S. News, SUCCESS,, and more! Follow Kacey on Twitter and subscribe to her blog to keep up with her travels and inspiring posts!