Maximizing Home Equity: Smart Strategies for Grand Junction Homeowners
If you own a home in Grand Junction, chances are it’s worth more now than when you first bought it. While you’ve been out hiking the Colorado National Monument, sipping wine in Palisade, or cruising the Riverfront Trail, your home’s equity has been growing in the background. But have you thought about how to put that equity to work for you?
At the Janice Burtis Team, we’re here to help you make the most of your home’s hidden wealth. Home equity—the difference between what your home is worth and what you owe—isn’t just a number on paper. It’s a valuable tool that can help you tackle big expenses, upgrade your home, or even give you extra financial freedom as you plan for the future.
That’s why we’re breaking down some smart and simple ways to use your home equity—whether that means saying goodbye to private mortgage insurance (PMI), getting a loan, or refinancing for a better deal.
Here are a few ways to tap into your home’s equity.
Home Equity Line of Credit (HELOC)
A HELOC is a flexible credit line that allows you to borrow against your home’s equity as needed. Unlike a home equity loan, a HELOC works more like a credit card, giving you access to funds over time rather than in one lump sum. This is a great option for ongoing expenses, such as home improvements or emergency funds, but be mindful that interest rates can fluctuate.
Cash-Out Refinance
A cash-out refinance replaces your existing mortgage with a new one for a higher amount, allowing you to take the difference in cash. This can be a smart move if you need funds for major expenses and can secure a lower interest rate in the process. However, since this increases your loan balance, it’s essential to ensure the new terms align with your financial goals.
Use Your Home Equity to Eliminate PMI
Private mortgage insurance (PMI) is an added cost that protects lenders, not homeowners. If you originally put down less than 20% on your home, you’re likely paying PMI each month. The good news? Once you’ve built up at least 20% equity, you can remove PMI by refinancing or requesting lender approval. Using your home equity strategically can save you hundreds of dollars per year by eliminating this extra fee.
Home Equity Loan
A home equity loan allows you to borrow a lump sum against your home’s value, typically at a fixed interest rate. This option is ideal for major expenses like home renovations, debt consolidation, or even funding educational costs. Since the loan is secured by your home, interest rates are often lower than personal loans or credit cards. Just keep in mind that missing payments could put your home at risk.
Reverse Mortgage
For homeowners aged 62 and older, a reverse mortgage offers a way to tap into home equity without monthly payments. Instead of making payments, the loan balance grows over time and is repaid when the home is sold or when the borrower moves out permanently. This type of loan can provide financial relief by covering medical expenses, supplementing retirement income, or even paying off an existing mortgage to reduce monthly expenses.
How Much Have Grand Junction Homes Appreciated?
Home values in Grand Junction have risen about 5% over the past year, making it a great time to check in on your home’s worth. Nationally, the average annual home appreciation sits around 3.5-4%, so we’re seeing stronger growth here locally. A mix of high demand, limited housing supply, and the area’s unbeatable outdoor lifestyle has made Grand Junction a hot market.
How do you calculate your own home’s equity?
Understanding your home equity starts with a simple calculation: subtract your outstanding mortgage balance from your home’s current market value. For example, if your home is worth $400,000 and you owe $250,000, you have $150,000 in equity. Knowing this number is essential for determining your borrowing power and financial options.
There are several ways to estimate your home’s value. You can use online valuation tools, check recent sales of similar homes in your neighborhood, or consult our team for a more accurate assessment. If you’re planning to use your home equity, having a precise valuation will help you make informed decisions about loans, refinancing, or selling your home.
Your home isn’t just a place to live—it’s a powerful asset. Whether you want to lower your monthly expenses, invest back into your property, or create some extra breathing room in your budget, there are plenty of options to explore.
At the Janice Burtis Team, we’re here to guide you through the process and help you make the smartest choices for your future. If you’re curious about your home’s equity or want to explore your options here in Grand Junction, let’s chat. Your home is one of your biggest investments—let’s make sure it’s working for you!
