The ‘Equity Home’ to Buy Your Next Home

Dear home buyer,

Let’s start with a helpful definition:

What is an ‘equity home’?

At Nuhom, we define the ‘equity home’ as a home you buy which appreciates in value over time. This doesn’t have to be your first home purchase, but it certainly can be. That appreciation in value is your equity and you can access it in three ways:

  1. Sell your home.

Home Equity = (Home Value) — (Mortgage Balance)

The two best ways to create equity or value is:

  1. Buy your home and allow the market over time to appreciate.

With either approach, time can be your friend, but only if you start early. We encourage home buyers to think early and start early.

We have watched many of our home buyers and friends buy their first home between the ages of 25–35. Today, they have benefited from home appreciation over time. Here are a few of those examples:

Home Owner 1

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City: Revere, MA

Type of home: Condominium

Year Purchased: 2015

2015:

  • Purchase Price: $290,000

2020:

  • Current Estimated Value: $485,000

Over a 5-year horizon, less their original downpayment investment of $29,000, these 2015 home buyers have gained $221,174 in home equity.

This equity is in the home and can be utilized one of the three ways stated above, at the beginning.

Home Owner 2

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City: Chelsea, MA

Type of home: Condominium

Year Purchased: 2015

2015:

  • Purchase Price: $345,000

2020:

  • Current Estimated Value: $530,000

Over a 5-year horizon, less their original downpayment investment of $51,750, these 2015 home buyers have gained $213,966 in home equity.

This equity is in the home and can be utilized one of the three ways stated above, at the beginning.

Real estate is generally a longer term investment especially when it comes to the home you live in. The examples above are homes purchased in developing cities that were ripe for growth. According to Zillow, home values have gone up 4.5% in Revere and 2.9% in Chelsea just over the past year. In both cases, the homes have appreciated quite significantly with a growth rate of 67% and 53% respectively from the original purchase price.

You can do it too

Buying a home is often looked at as a daunting process. It doesn’t need to be. We have made the process simple, from helping you understand what you can afford to buying the home you love with ease.

Here are some tools to get you started:

We believe homeownership is a great investment if thoughtfully executed.

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