How do I get home equity?

The traditional way to get home equity is to purchase your home and begin making payments. After you have made payments, the difference between what your homes’s worth and what you have remaining is the equity. It can also be built by purchasing a home beneath its assessed value. The lower you buy a home below its assessed value, the more equity you have when you initially sign your mortgage.

If I want to get into the house flipping market, should I look for homes that have the potential for huge sales through their equity?

Yes, you should definitely look for homes that assess for more than what the asking price is listed. That way when you are finished with the home improvements, the value of the home will rise and you can ask more for the home. When you combine that new selling price with the already built up equity you have a home that will make you a bigger profit upon selling. The one note of caution would be to pay careful attention to how much you ask. You do not want to have to make several payments on this home because it will eat into your profit margin. Keep the asking price reasonable in order to sell the home quickly.

What is a reverse mortgage?

A reverse mortgage works by using the equity in your home to pay you. It is only available to seniors who either have a very low debt on their home or own their home outright. The mortgage company uses the equity in the home to make payments to you and upon you leaving the home, the remaining equity and home is sold to fulfill the debt.

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This entry was posted on Thursday, March 20th, 2008 at 12:05 am and is filed under Financial Services. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.