Posted On: June 1, 2026 by Prevail Bank in: Home Loans
How to Build Home Equity Faster (And Smart Ways to Use It)
Home equity is the difference between the balance on your mortgage and the current value of your home. For example, if your home is presently valued at $310,000 and you have $225,000 left on your mortgage, you have $85,000 of equity in your home. ($310,000-$225,000 = $85,000)
Is having equity in your home good?
Having equity in your home is important because it is an asset that counts toward your total net worth and can provide you with financial flexibility.
Important things to know about the equity in your home:
- If you’re paying down your loan and the market value of your home maintains or increases, your equity will increase.
- Having equity in your home provides the opportunity to borrow funds against it. A Fixed Equity loan or HELOC (Home Equity Line of Credit) uses your homes equity as collateral for you to fund things such as home renovations, debt consolidation, or even college tuition! Once you have the equity and become approved for a Home Equity Loan, those funds are available for you to use – however you choose. Prevail Bank can help you with a HELOC or Fixed Home Equity loan.
- Are you thinking about selling in the future? The more equity you have in your home when you sell, the greater return you’re going to receive after the mortgage is paid off from that sale.
- While it is not common in today’s market, equity may also decrease even if you make all on-time mortgage payments. If the value of your home decreases, so does your equity.
5 Tips on how to build equity in your home
- Make a big down payment
- Make extra payments
- Refinance to a shorter term
By refinancing to a shorter-term mortgage, you may be able to secure a lower interest rate. Your monthly payment amount will go up, but remember, you will be paying more towards your principal. The more paid towards principal, the quicker you will build equity. The growth of equity may outweigh the upfront cost for that refinance.
A Prevail Bank Mortgage Loan Originator (lender) could help you determine if a refinance makes sense for your circumstances.
- Home improvement projects
For example, projects such as replacing the garage door, updates to the kitchen, a new front door, stone veneers (inside/outside), and updating bathrooms may make more of impact on your home’s equity.
In comparison, projects such as adding a pool, extending the room (and losing a bedroom), theater rooms, and garage conversions may not necessarily add to the value and could even work against you when it’s time to sell.
- Add curb appeal
Step back and look at your home from the end of the driveway and note things that you could improve that require minimal or low investment.
Power-washing the home, fresh paint, repairing the grass, adding flowers and shrubs, new mulch, trim current landscape, mailbox replacement/touch up, and cleaning up clutter are all improvements that require minimal investment.
Putting Your Home Equity to Work
Building home equity doesn’t happen overnight—but with consistent mortgage payments, smart financial decisions, and well‑chosen improvements, it can become one of your most valuable financial assets. Whether your goal is to strengthen your net worth, prepare for a future sale, or create flexibility for life’s big expenses, growing your equity puts you in a stronger financial position over time.
Once you’ve built equity, the opportunity doesn’t stop there. As mentioned earlier, home equity loans and HELOCs can give you access to funds for renovations, debt consolidation, education costs, or other important goals—while often offering lower interest rates than other borrowing options. Used wisely, your home equity can be a powerful tool to help you move forward with confidence.
If you’re curious about how much equity you have, or wondering whether a home equity loan, HELOC, or refinance might make sense for you, a Prevail Bank Mortgage Loan Originator is here to help. We’ll walk you through your options and help you choose a solution that fits your needs—so you can make the most of the equity you’ve worked so hard to build.
Prevail Bank – Equal Housing Lender
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