How the Economy Affects Your Home Equity

Pat provides practical information about your home's equity.

Economy & Your Home

Local real estate values are directly impacted by supply and demand and economic health. The good news is the federal reserve reports that the end of the 2021 total household wealth in equity was at its all-time high.

Staying informed of your home equity is an important component of your financial portfolio and is included in the GDP (Gross Domestic Product). Economic factors that affect your equity include demographics, which come down to supply and demand, location and the economic health of the community in which the property is located, such as job opportunities or school districts.

How can I improve the equity in my home?

The overall condition of a property such as maintenance upkeep, improvements and municipal permits in place, all contribute to your home’s value. It is important to remember there are also factors that can decrease the equity in your home. For example, if the HVAC system or the roof are deemed to be at the end of their life, the cost to replace them will decrease the value and thus the equity in your home.

Higher Interest Rates you pay to the bank decrease how quickly you build equity. By evaluating Interest Rates, you can prepare to refinance when the Fed lowers Interest Rates. It is also important to know your home’s equity when you borrow from a lender (i.e. Home Equity Loan). If you’re currently paying a MIP (Mortgage Insurance Premium)—because you put less than 20% down when you purchased your home—once you reach 20% equity, you should be able to eliminate this monthly premium with your lender.

Another key factor to build your equity is to make additional payments toward the principle of your mortgage. Making one extra payment a year could build your equity significantly. For instance, paying an additional $100 a month toward the principle would reduce a 30-year mortgage to a 24-year mortgage, adding 6 years of your monthly payment towards your equity. Some lenders even offer bi-weekly payments!

How do I calculate my home equity?

To calculate the equity in your home, consider where your property is located as well as any improvements you’ve made in the home and housing market in the area. Making improvements to your home is a great way to increase the equity in your home, so it is important to include budgeting for maintenance and improvements for your home.

Calculating your home’s equity is based on the current value of what it would be worth, minus the debt you owe. You can have this evaluated through a formal appraiser, or you may contact me for a FREE equity review!

About the author

Pat along with her husband, Mike Settar, have been Harrison Township residents for 31 years. Pat and Mike raised their three daughters, Meryl, Carly, and Paige in Mullica Hill. All three Settar girls attended the highly rated Harrison Township Elementary Schools and graduated from Clearview Middle and High School. Pat and Mike love being residents and raising their family in Mullica Hill. 

Pat Settar is a prominent member of the community. She is the Chair of Harrison Township Beautification Committee, a proud supporter of the Harrison Township Historical Society, annual sponsor of Harrison Township Day and Lights on Main and supports a variety of other causes in our town.

Pat has been recognized with several Real Estate industry accolades, including Top 1/2% in the BHHS Network, a member of Philly Magazine’s Who’s Who for Top Producers, and Platinum Award from the Board of Realtors, and many others. Her most cherished industry honor is the Don Brogan Peer Appreciation Award. Pat was chosen for this prestigious award by her peers from the Gloucester/Salem Counties Board of Realtors for her high ethical standards, maintaining cooperation with others in the industry, having a spirit for the Real Estate business, and her knowledgeable of the profession. Pat Settar has built an all-female team and is proud to mentor and support these incredible women in their Real Estate careers. The Pat Settar Team has a 5-star rating on Zillow, she says that making her clients happy, makes her happy!

(856) 343-6000