Building Equity

The single most important reason to buy your home can be expressed in one word -"EQUITY".

As long as you are renting, you are building equity for someone else and not yourself. When you purchase a home some of the money you pay every month goes towards building your equity in that home, not the equity of the landlord. What is equity?  It is the market value of your home less what you owe on the mortgage.  Building equity in your home allows you to plan for the future.  It allows you to plan for retirement, a child's education and many more important life decisions.  If you have a fixed rate mortgage then your payments remain the same. When you rent, the payments can go up every year.

In the first few years of most mortgages, the majority of your monthly mortgage payment goes toward interest on the loan.  Over time, an increasing amount of the monthly payment goes toward reducing mortgage balance, or "principal."  As you make payments, you reduce the principal and increase your share, or "equity," in your home's value.  If your home increases in value through appreciation, your equity will build even faster.  Building equity - or savings - in your home is important.  For many people, it lets them plan for retirement and other future goals.

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