How to Use Equity in Your Home

A front door with street numbers on top and lights on either side to illustrate how to use equity in your home

Are you a homeowner dreaming of giving your house a fresh look? Do you find yourself wondering about the financial resources to make those exterior upgrades you’ve been eyeing for years? Let’s look at the power of home equity and how to use that equity in your home, turning your renovation dreams into reality.

What is Home Equity?

Home equity is the difference between the current market value of your home or real estate and the outstanding balance on your mortgage. Essentially, it’s the portion of your property that you truly own. As you pay down your mortgage or as the value of your home increases, you are building equity.

How is Home Equity Calculated?
Home equity is calculated by subtracting the amount you owe on your mortgage from the current market value of your home.

People discussing home renovations in a yard to illustrate how to use equity ion your home.How to Use Equity in Your Home to Renovate

Once you’ve built up equity in your home, you can use it to finance various projects, including exterior home upgrades and other home improvements. This can be done through options like home equity loans or lines of credit.

What Are the Different Ways to Access Home Equity?
Homeowners can access their home equity through options such as home equity loans, home equity lines of credit (HELOCs), or a cash-out refinance where you get a lump sum of money.

What Are the Best Ways to Update the Exterior of Your Home?

When it comes to enhancing your home’s exterior, options abound. From refreshing paint colors to durable fiber cement siding, the possibilities are endless. James Hardie siding products are a popular choice for exterior upgrades due to its durability, low maintenance requirements, and aesthetic appeal.


For homeowners looking to breathe new life into their property, leveraging home equity can be a game-changer. However, it’s natural to have questions and concerns along the way.

Do I Have Enough Equity to Fund My Exterior Renovations?
The amount of equity you have available depends on factors such as your home’s current value and your outstanding mortgage balance. Consult with a lender or financial advisor to assess your available equity and discuss your renovation goals.

What Are the Additional Costs of Using Home Equity?
Utilizing home equity may involve fees such as closing costs and appraisal fees, depending on the type of financing you choose and even your credit score. Be sure to factor in these costs when considering your renovation budget.

Is Using Home Equity to Renovate My Home a Good Investment?
Renovating your home can potentially increase its value and enhance your overall enjoyment of the property. Conduct research and consider the long-term benefits of your proposed renovations before proceeding. According to ‘Remodeling Magazine’ and ‘Zonda Media’ in 2023, exterior home renovations had a 50 to 95% return on investment.

Are Interest Rates Too High for Home Equity Financing?
Interest rates for home equity financing can vary based on market conditions and individual financial factors. Explore different financing options and compare interest rates (adjustable or fixed rate) to find the best fit for your budget and needs. Higher interest rates mean monthly payments will be higher because you’re paying interest at a larger rate.

What Are the Risks of Using Home Equity for Renovations?
While leveraging home equity can unlock funds for renovations, it’s important to consider the potential impact on your overall financial situation and home equity position. Work with financial professionals to assess the risks and benefits of using home equity for your renovation project.

By understanding the ins and outs of tapping home equity and exploring the possibilities it offers for exterior upgrades, you can embark on your renovation journey with confidence. With careful planning and strategic use of your home equity, the home of your dreams is within reach. Reach out to Joseph Ketner Construction to see how we can transform your home.