Home Equity

Check the definition of Home Equity here.

Value of Home Equity will increase over time for TWO reasons:
1. Property price tends to increase over time (assumption)
2. Mortgage balance reducing over time (assume no refinancing)

What can you do with increased in home equity?
1. Keep it for retirement (when you finally have the property sold)
2. Refinance it for investment (since mortgage interest rate is the cheapest rate amongst all financing)

Should I refinance my property?

If you have a loan applied more than 5 years ago... it is time to refinance it.

Why?

1. Capitalising your asset. Grow your wealth. Release part of the equity, refinance it at low cost, reinvest it to buy another property or investment;
2. Get better rate NOW! Save interest;
3. Reducing the installment by extending the term / lower rate;
4. Get a better package, home loan is more flexible now than those 5 years ago.

You either SAVE or EARN MORE by refinancing your property.