13 Sep What is home equity (Overwaarde)?
Anyone who has ever bought or sold a house has likely encountered the term overwaarde (home equity). It’s a frequently used concept in the real estate world, but many people still don’t fully understand what it means or how to use it. Given that home equity plays a crucial role in the buying and selling process, we’re here to help clarify what it is and how you can benefit from it.
What is home equity (Overwaarde)?
Home equity is the difference between the current value of your home and the remaining balance on your mortgage. Essentially, it’s the profit you make when selling your house for more than what you owe on your mortgage. In periods of rising home prices, many people take advantage of this equity by selling their homes, aiming to maximize the profit from their sale.
When dealing with home equity, it’s wise to seek advice from a real estate agent. They can guide you on the best next steps. Spending all your equity at once might not be the smartest decision. By consulting a knowledgeable agent—like the experts at IMMO Arie van der Lee—you’ll have a better understanding of the options available. Read on for a brief overview of your choices.
What can you do with home equity?
Once you sell your home and receive equity, there are several options. Many people use their equity to buy a larger home. Since you’ve made a profit, it becomes easier to secure a larger mortgage for your next purchase. Alternatively, you can use the equity to fund renovations on a new or existing property. Or, you might choose to set it aside in savings as a financial cushion for the future.
Having home equity is always a good thing—it means you can sell your home for more than your mortgage is worth. With so many possibilities, anyone can use their equity wisely. If you’re looking for a new home, be sure to check out other articles on our blog for tips on buying or selling a house.
