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As
appreciation drives the value of your home upward, and your mortgage's
principle balance heads downward, a divide is created. This difference
represents your home equity.
Property Value - Total Mortgage balance = Net Home Equity
Eg. $200,000 value - $175,000 balance = $25,000 net equity
However, this is a very basic understanding of how much liquid capital
your home actually represents to you. Most homeowners neglect to
factor the total cost of selling their home. In reality your home
equity is calculated like this:
Property Value - Total
Cost of Selling Home - Total Mortgage Balance = Actual Net Home
Equity
Eg. $200,000 value - $12,000 (6% cost) - $175,000 balance = $13,000
net
As you can see from this example, nearly 50% of the actual net home
equity went toward the process of selling this home. However, using
Movement, Inc. the actual net home equity would look more like this:
Eg. $200,000 value
- $0 cost - $175,000 balance = $25,000 net equity Or (Paying buyer
agent, if necessary)
EG. $200,000 value - $4,800 2.4% cost - 175,000 balance = $20,200
net
In either example you will save thousands using our "For
Sale By Movement" program, greatly improving your overall return
on investment. |
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