Homeownership can require a significant investment of your financial resources, but it offers many benefits as well. One of the most important advantages is the chance to gain equity.
Increasing Your Equity
Buying a home and getting a mortgage allows you to begin an investment that offers a large potential return. Each of your monthly payments is partially applied to the principal balance of your mortgage. Some of your monthly payment goes toward the interest, but the rest affects the overall loan amount, increasing the portion of your home’s value that you own.
You can view your mortgage payment as an investment. Homeownership allows you to contribute to your own financial assets. Down the road, you may use your equity to cover home improvement costs or purchase a new home.
