Texas Homeowners Increasing Home Equity with Refinancing
Recent Federal Reserve data found that Texas refinance mortgage loans are helping homeowners in the state grow their home equity successfully.
Home equity values in the Texas and across the country have experienced a spike in home values and experts point to mortgage refinancing options as the primary reason for the positive change. According to record, this jump in equity is the highest its been in the last 60 years based on the percentage comparison.
What is Home Equity?
Those who have been impacted by the local housing market may have experienced financial hardship, but some still question “what is home equity and how does it affect my bottom line?”
Home equity is essentially homeowners’ value obtained from the home due to a combination of lowering the loan principal via monthly payments and the housing market’s rise (or fall) in home values.
For example, if a homeowner takes out a mortgage of $500,000 and lowers the principal loan balance to $300,00, the homeowner have gained a home equity of $200,000. Additionally, an updated appraisal of the home may result in a finding that the home’s value is at $525,000, therefore the homeowner’s total home equity has risen to $225,000.
When trying to understand what is home equity, these two factors play a major role in determining this figure.
Texas Refinance Mortgage Loans Helping Homeowners
Texas refinance mortgage loans are doing a great deal in assisting homeowners in taking action to improve their home equity. Refinancing a home often leads to lower monthly payments and adjusted terms that can help Texans pay off mortgages faster.
There are many ways to seek out refinancing, either with a private lender or through the HARP Refinance Program that keeps costs considerably low for struggling Texans.
This recent turn to take a more proactive step toward gaining home equity shows that homeowners in the state are staying responsible with their loans, despite the housing market.