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How to Build Home Equity in Less Time

Owning your own home can undoubtedly create quality of life, but did you know there are also lucrative ways to reap the benefits of that giant piggy bank you’re living in?

Briefly, equity is the difference between what you owe on your home and its current worth. That value can go up and down depending on the market, so building that equity with intention will give you greater power over the changing tides. Whether you’re planning to pursue a cash-out refinance for future needs or simply want to increase the equity in your home for when it’s time to sell, we offer a few ways to speed up the process and provide you more opportunities.


If you already own, then you know that the amount of the down payment will increase your equity from the get-go. FHA and some conventional loans offer a low minimum required down, such as 2- or 3% and it can be tempting to keep that cash up front, however 20% will build that equity faster. Even if you’re refinancing – perhaps for a lower interest rate – you may consider a cash-in option that will put more money in on your mortgage.


When interest rates are low as they are now, it could be prudent to refinance your current 30-year mortgage into a shorter term such as 15 or 20 years. If you’re able to handle a larger monthly payment, the savings in interest will help to offset the increase over time. Because of that savings and existing equity, it won’t take twice the money to pay off your home in half the time. Our team at EnTrust Funding (ETF) can help you calculate those numbers and a timeline.


If you’re not quite ready to increase your monthly house payment for a shorter term, there’s another way to chip away at the principle. Experts suggest homeowners add to their principle by either making one extra payment per year or dividing that one month’s worth by 12 and increasing your payment by that amount. Just be sure to specify that the surplus goes to principle. Even slightly rounding up your existing payment will make a difference that you won’t feel, much like an automatic savings deposit.

It’s also wise to earmark a specific percentage of any substantial bonus income you receive, like an inheritance or tax refund, to go to your principle.


Making improvements, both small and large, can greatly increase the value in your home. A minor kitchen remodel is one of the most popular and wise investments a homeowner can make to that end. Refinancing for cash-out to make these improvements will more often than not pay for itself with the gain in equity.


These are all great ways to aggressively increase the equity in your home, however there is always the time method. While staying on top of your credit and maintaining your home’s condition, the eventual ebb and flow of the market will organically increase the value of your home and the equity will be there when you need it.

As you can see, there are ways to either reduce your mortgage debt or increase the value of your home – or both! The EnTrust team is happy to help with your ultimate objectives of robust equity, be that refinancing for immediate needs or planning for long-term value. Let’s talk.

Photo by Austin Distel on Unsplash

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