{"id":5406,"date":"2024-04-04T09:59:48","date_gmt":"2024-04-03T23:59:48","guid":{"rendered":"https:\/\/financialplus.com.au\/?p=5406"},"modified":"2024-04-04T09:59:48","modified_gmt":"2024-04-03T23:59:48","slug":"homeowners-now-an-extra-71000-richer-on-average","status":"publish","type":"post","link":"https:\/\/financialplus.com.au\/homeowners-now-an-extra-71000-richer-on-average\/","title":{"rendered":"Homeowners now an extra $71,000 richer (on average!)"},"content":{"rendered":"

You may not feel richer, but if you\u2019re a homeowner, there\u2019s a decent chance your personal wealth has surged over the past 12 months thanks to soaring property values. And it could open up a world of exciting possibilities.<\/strong><\/p>\n

Sometimes you\u2019ve just got to shake your head in disbelief at the resilience of the property market.<\/p>\n

Despite a cost of living crunch and higher interest rates, national home prices have somehow ploughed on over the last year and a bit.<\/p>\n

CoreLogic says\u00a0home values nationally are up $71,832 since January 2023<\/a>\u00a0\u2013 a jump of 10.2% in just 14 months \u2013 which averages out to an increase of $5,130 per month.<\/p>\n

To put that into perspective, last financial year the\u00a0average full-time Australian worker<\/a>\u00a0earned $6,565 per month after tax.<\/p>\n

The thing is, higher values can give homeowners much more than a warm inner glow.<\/p>\n

Rising property prices can also provide opportunities to boost your wealth further \u2013 without having to hammer in a\u00a0For Sale<\/em>\u00a0sign out the front.<\/p>\n

Let\u2019s take a closer look.<\/p>\n

Your home equity can unlock further wealth<\/h3>\n

An uptick in your home\u2019s value can drive an increase in home equity \u2013 assuming your mortgage hasn\u2019t increased.<\/p>\n

Home equity is the difference between the market value of your home and the balance of your home loan.<\/p>\n

So if your home is valued at $1,000,000, for example, and you have $500,000 left on your home loan, your home equity is $500,000.<\/p>\n

The exciting thing about home equity is that it\u2019s not just a number on a page. It can be a valuable resource that helps you forge ahead financially.<\/p>\n

Three ways to make home equity work harder<\/h3>\n

Plenty of banks let you use home equity as security for additional borrowing or to refinance your current home loan \u2013 all without having to sell your home.<\/p>\n

Here are three ways you could make your newly enlarged home equity work harder:<\/p>\n

1. Refinance to save on interest<\/strong><\/p>\n

Your home loan is probably one of your biggest household expenses.<\/p>\n

Refinancing to a new loan or lender can help you save with a more competitive rate, or by taking advantage of loan features that help you pay off the mortgage sooner (such as an offset account).<\/p>\n

And the more home equity you have, the easier it can be to refinance.<\/p>\n

2. Use your home\u2019s equity to fund an investment property<\/strong><\/p>\n

Your home equity may be used as a deposit on an investment property in lieu of cash savings.<\/p>\n

By becoming a landlord, you could benefit from regular rental income, potential tax savings, and an increase in the value of your rental property over time.<\/p>\n

Not to mention having a nice little nest egg that could help fund your retirement or \u2013 if you\u2019re feeling particularly generous \u2013 pass on to your children.<\/p>\n

3. Put home equity to work funding renovations<\/strong><\/p>\n

One of the beauties of home ownership is that you can add value to your property \u2013 regardless of what the market is doing \u2013 with a few well-planned renovations.<\/p>\n

But how do you fund those renovations if you\u2019re tight for cash?<\/p>\n

Well, one way is to tap into your home equity to fund the renovations.<\/p>\n

So how does \u2018cashing out equity\u2019 work?<\/h3>\n

It might sound complicated \u2013 but we promise it\u2019s not.<\/p>\n

Let\u2019s say you bought an $800,000 house three years ago that, partly due to last year\u2019s property price surge, is now worth $1 million.<\/p>\n

And let\u2019s also say you originally took out a $600,000 loan for that house, which you\u2019ve managed to pay down to $500,000 (you little beauty!).<\/p>\n

By refinancing that $500,000 loan into a $700,000 loan (70% of your property\u2019s new market value), you can unlock $200,000 in equity to help fund your renovations or as a deposit to buy an investment property.<\/p>\n

It\u2019s also worth noting that banks typically let you borrow up to 80% of a property\u2019s market value.<\/p>\n

Which means if you upped the ante and refinanced to an $800,000 loan, you might be able to unlock $300,000 in equity.<\/p>\n

So if you\u2019d like to make your home equity work harder, call us today for a clearer picture on how much equity you have \u2013 and how you can tap into it to potentially grow your wealth.<\/p>\n

Disclaimer:<\/strong>\u00a0The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.<\/p>\n","protected":false},"excerpt":{"rendered":"

You may not feel richer, but if you\u2019re a homeowner, there\u2019s a decent chance your personal wealth has surged over the past 12 months thanks to soaring property values. And it could open up a world of exciting possibilities. Sometimes you\u2019ve just got to shake your head in disbelief at the resilience of the property […]<\/p>\n","protected":false},"author":23,"featured_media":5407,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[110],"tags":[],"class_list":{"0":"post-5406","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-home-loans","8":"entry"},"yoast_head":"\nHomeowners now an extra $71,000 richer (on average!) · FinancialPlus Mortgage Broker Gold Coast<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/financialplus.com.au\/homeowners-now-an-extra-71000-richer-on-average\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Homeowners now an extra $71,000 richer (on average!) · FinancialPlus Mortgage Broker Gold Coast\" \/>\n<meta property=\"og:description\" content=\"You may not feel richer, but if you\u2019re a homeowner, there\u2019s a decent chance your personal wealth has surged over the past 12 months thanks to soaring property values. 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