If you’re already a homeowner, congratulations! Most likely, you have already built up equity based on the original downpayment, monthly payments, as well as (hopefully!) increased property value.
The good news is you can put that equity to work when it’s time to purchase a new home for the next step in your life’s journey—more room for a growing family, downsizing as needs change, or just wanting a fresh start.
Limited time offer: Members making qualifying home purchases are eligible for a rate discount and a $2,000 lender credit through June 30, 2026. Learn all the details here.
Step 1: Figure Out How Much Equity You Already Have
You can do a quick calculation to figure out how much equity you have in your home right now based only on what you paid for the home and how much you still owe.
Original purchase price - current loan balance = equity.
So, if the price of your home when you bought it was $500,000 and you currently owe $300,000 on your mortgage, you have $200,000 in equity.
The actual price you sell your home for will ultimately determine how much you walk away with (equity). You can get an estimate on that figure by finding out the current market value. The best way to determine that is through a professional appraisal, but if you’re not in the process of selling your home, you can find general estimates on websites like Zillow. Keep in mind that actual price you ultimately get for your home will depend on several factors, including the house’s condition and current market.
The formula to determine equity using market value is: Current estimated market value – current loan balance = equity.
Explore Home Loan Calculators.
Step 2: Maximizing Equity for the Next Home
Here’s a tip from SAFE’s home loan consultants: the more you put down on a mortgage, the lower the interest rate is likely to be.
And here’s where that equity comes in handy. You can use it toward your next down payment – potentially putting down more than 20% on your next home and instantly have significant equity in your new home! That equity in turn provides a cushion for changes in the real estate market, as well as collateral for Home Equity Lines of Credit (HELOCs) for home upgrades or improvements.
Find SAFE’s Latest Home Loan Rates.
Step 3: Discuss Options with a SAFE Home Loan Consultant
SAFE’s home loan consultants are ready to help members take the next step in their home buying journey. Whether you just want to talk about options or start the loan process, they can help!
SAFE’s home loan consultants like to take the time with each member to really listen and explore all the ways SAFE can assist, so we recommend making an appointment with a consultant for a time that works best for your schedule.
