Every home has a value, even if yours isn’t a 12-bedroom mansion with an ocean view. But there’s one thing that every homeowner has in common, regardless of how much their home costs: You’ve all invested time, sweat and love in turning the house you bought into a home sweet home for your family. So it’s only fair to assume that every home has a value, whether this one is emotional, collateral or purely financial. It’s important not only to understand the difference between these three elements but also to be able to combine them to measure how much your home is worth to you. Here’s a simple way to find out.
An emotional value: The place where the heart belongs
There’s nothing like a home you love so much that you’d even want to plan your staycation in your living room and why shouldn’t you? You’ve invested a lot of time creating a welcoming interior decor, so it’s only fair to want to make the most of it. Comfortable homes tend to share some common features, such as a firepit for long summer nights and to toast your marshmallows, and great entertainment facilities – a home with a poor Internet connection is no home at all in 2017! But more importantly, people feel emotionally attached to their home because that’s the place where they have their best memories. Togetherness as a family unit is by far the most valuable that your home can get.
A collateral value: The value of ownership
But not everything about your home needs to be a heart matter. There’s a form of monetary change that is connected to your home, and it’s called the home equity. It’s the equivalent of finding a dollar at the back of your drawer, except that how much you find is in your control. The equity is the difference between the appraised value of your home and what is left to pay off on your mortgage. Say your home is worth $175,000 but you have still $120,000 to pay off your mortgage. The equity is $55,000 and can be used as collateral by homeequitylineof.credit for a second loan. The collateral allows you to take a second loan on your property based on how much of your home you already own. It sounds complicated, but it’s a value that is worth knowing about, especially if you’re planning home improvement work and are looking for ways to finance it.
A financial value: How much it is worth if you were to sell today
If you were to sell your home today, its value is its sale price. If you’re an avid renovator and homeownership.ca reader, you can increase its value with smart home improvement tips. A new bathroom or an income suite can help to bring the selling price up by several thousand. Definitely, the kind of value you want to bear in mind!
A value in your heart and a value in your budget, that’s how much your home is worth. In the end, only you can define its true value. But it’s best to know ways of evaluating what matters the most to you. You never know what surprises your home sweet home has for you.