There are many reasons your home may increase in value. Maybe you made renovations and added features to increase its value. Or perhaps you haven’t made any changes, but home prices in your area are rising. Maybe it is better connected than before or now has better schools.
No matter the reason, there are some benefits related to having a higher home value. While some are related to selling your home, not all are.
The Obvious Benefit – If You Sell
The most obvious benefit of a better home value is that you will get more money for it if you sell your home.
This can mean that your home became a better investment than it was before. You can even take advantage of this to sell your home and upgrade to a better one using the profits from the sale. Or you can benefit from getting more money from your home sale and have a larger retirement fund.
If Circumstances Change and You Sell Your Home
Even if you don’t think you want to sell your home anytime soon, you may find your circumstances changing. You never know what’ll happen, such as a dream job offer in another state. When this happens, you will reap the rewards of the higher price.
Benefits for Those With Mortgage Insurance
If you have private mortgage insurance, you will be able to cancel the premiums once you get to a now lower ratio of the loan-to-value. This is because the loan-to-value ratio of your mortgage decreases as its value rises.
This can lead to monthly savings that add up to thousands or tens of thousands over time.
The Ability to Adjust Your Mortgage
Those who don’t want to sell yet may also want to consider a cash-out refinance. This lets you turn your new home equity into cash you can use for other purposes, such as paying off debt or medical expenses.
