Home Equity: What is it? How do I build it?

If you’re a homeowner or have been looking into becoming a homeowner, you’ve likely heard the term home equity thrown around a bunch. But what does it mean? What is home equity? How do you grow home equity? How do you use home equity? Like many things in the financial world, home equity can seem confusing and overwhelming – but it’s actually easier to understand and take advantage of than you may think, especially when you’re working with Fox Communities Credit Union (Fox). So, without further ado, let’s unravel the mystery of home equity and turn your home into your greatest financial tool.



Put simply, your home equity equals the amount of your home that you own. So, let’s say your home is worth $200,000 and you still owe $150,000 on your mortgage. That means your home equity equals $50,000. That also means the more you pay off, the more you own, and the higher your home equity.


As we stated earlier, the more you have paid on your mortgage, the more home equity you’ll have. But that’s not the only way to grow your equity. In fact, you can help grow your equity during the home-buying process in a few ways, such as by making a larger down payment or opening a mortgage with a shorter term. You can also make larger monthly payments than what your mortgage requires in order to pay down the loan faster and attain 100% equity sooner. Making biweekly payments also helps pay down your loan faster.


Your home equity will really come in handy if you need some extra cash for renovations, vacations, or other projects. That’s because your equity will allow you to open a home equity loan or a home equity line of credit (HELOC) here at Fox. And if you’re a homeowner who needs cash quickly but is still working on building up your home equity, check out our unsecured It’s About Time Homeowners’ Loan.

And if you have any questions at all, please come see us at one of our many Fox locations or get in touch with our friendly Fox team.

Fox Communities Credit Union is a full-service, not-for-profit financial institution serving members throughout Eastern Wisconsin, including Appleton, Green Bay, Oshkosh, Manitowoc, and Milwaukee.