How to Quickly Build Equity in Your Home

How to Quickly Build Equity in Your Home

As a homeowner, you may want to build equity in your home sooner rather than later for a variety of reasons.

For example, you might want to build equity if you didn’t make a down payment of 20% of the home’s value. If that’s the case, you may be stuck paying for private mortgage insurance until you reach 20% equity, like I am.

But no matter the reason, there are several ways you can quickly build equity in your home.

1. Use Your Tax Refund

Did you get a tax refund this year? If you did and you haven’t spent it yet, you could apply that money toward your home mortgage. By paying down the loan against it you can increase the equity in your home.

2. Increase Your Monthly Payment

If you have extra room in your budget, use the money to make larger payments toward your outstanding home mortgage. Make sure the extra money you pay each month goes straight toward the principal on your loan. With some companies this is automatic, but with others you have to specify how you want the extra money you’re paying to be used. If you don’t specify, they may apply it toward future payments, including the interest and escrow balances, not just the principle. If you pay extra toward the principle, not only will it pay off your loan faster, but also decrease the amount of interest you pay over the life of the loan.

3. Use Bonuses

Do you receive bonuses at your job occasionally? If you do, use them to pay down the outstanding debt against your home. Once again, the extra money should go toward the principal amount of the loan. Using a bonus this way is another great way to build up the equity in your home.

4. Change Your Payment Schedule

Rather than making your home loan payments once a month, split it in half and make it every two weeks. By doing this, you will actually make 26 half-payments in a year rather than 12 full payments. Doing the math, you end up with a full extra payment each year.

5. Home Improvements

Increasing the value of your home will raise your equity in it. Therefore, if you have a few home repairs you’ve been putting off, get them done. Go ahead and install those energy efficient windows your home needs. Or, finish the basement now rather than continuing to put it off. These things could help you raise the value of your home. Making smart improvements through careful planning can help you achieve your goal of increasing the equity in your home.

6. Refinance

Another way to build equity in your home is by refinancing your loan. Through refinancing you may be able to shorten the term on your loan or even reduce the interest rate. However, make sure you consider all of the associated costs before you do this to ensure it’s worth the time, effort, and cost.

7. Get a Second Job

When you want to build equity quickly you could consider getting a second job, even if only temporarily. Then, use the extra income to pay down your home mortgage quicker and build up equity in your home.

If you’ve been wondering how to quickly build equity in your home, try one of the options above. It may be just the answer you’ve been looking for.

What other ways would you choose to quickly build equity in your home?

Written By
Sydney White is a Texas-born stay at home mom who enjoys spending time with her family, bargain hunting and, of course, writing. She is currently the editor-in-chief of


  1. I’m not really building equity just for the sake of equity–I don’t want a mortgage during early retirement. Right now we’re eliminating other higher-interest debt (student loans), but after that we plan to eliminate our mortgage pretty quickly. I’m drooling thinking of all the freedom we’ll have once we don’t have a mortgage. 🙂 And it’s a bonus that we have a lot of equity in our home, to boot.

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