American Heritage Homes

Custom Homes for Sale in St. George

Equity: What It Is, Ways To Build It, & Why You Might Have Some

Jack and Sally are neighbors. Jack rents his house from a landlord, while Sally owns her home. They both pay similar housing costs each month to enjoy the neighborhood in which they live. What’s the big difference between the two? Equity. Sally’s monthly payments are working for her, helping her to gain financial stability. Jack’s, on the other hand, are going straight into his landlord’s pockets.


When you own your home, it’s more than just a place to live; it’s also a financial asset. As you pay your mortgage each month, the money you put toward principal acts as a kind of forced savings. In other words, your money is never really “going down the drain,” so to speak. That’s because, as you pay down principal, your equity (the amount of your home you actually own) grows. This equity can eventually become liquid cash that you can access, either by selling your home or borrowing against it.

While there are undoubtedly other ways to grow your wealth, and you should explore all the possible avenues available to you*, the truth is this: We all need a place to live. If you’re going to pay housing costs each month, you might as well build equity while you’re at it.


Put more down when you buy.
If you’re not already a homeowner but are considering taking the plunge, the more you can put toward your down payment, the more equity you’ll have right off the bat.

Pay your mortgage (and then some).
We’ve already established that paying your mortgage helps you to build equity, but if you can make extra payments, you’ll grow your equity even faster (and be able to pay off your loan sooner).

Make improvements.
Adding a little TLC to your home, like an updated kitchen or bath, can increase its value and boost your equity. Just be careful about which projects you choose. Even though your home’s value may increase, it doesn’t mean you’ll recoup all the money you put into it. Check out these home upgrades that provide the biggest payback.

Add curb appeal.
According to Consumer Reports, improving your home’s curb appeal can boost its value by about 3%-5%. And you don’t have to hire a landscape architect to realize a significant change. Simple things like trimming shrubs, planting flowers, painting your front door, and pressure washing the siding can make a big difference for just a few bucks.

Shorten your loan term.
Choosing (or switching to) a 15-year loan can help you gain equity much faster than the more common 30-year mortgage. The tradeoff, however, means much higher monthly payments, which can make it harder to qualify for your loan. Talk to me about whether this would be a good option for you based on your current financial situation.


If you’re currently a homeowner, there’s a good chance you may already have equity available to you. According to CoreLogic, the average annual equity gain for homeowners in the third quarter of 2017 was $14,888. In addition, data from the Federal Reserve revealed that homeowner equity jumped 10.3% from Q1 2017 to Q1 2018 — with a 3.5% increase in the first quarter of 2018 alone. To top things off, home values have surpassed their pre-recession peaks by 16%, according to the Federal Housing Finance Agency.

Home Values Over the Past Decade
While price appreciation varies by region and even neighborhood, the overall trend is that home values (and, consequently, homeowner equity) have gone up — and will likely continue to do so.
Guest post from our good friend Ben McAffee and First Colony Mortgage. Thanks for sharing these awesome tips with us!
Client Testimonials
  • Hi my name is Brion Egan and my wife is DeAnna. We are getting ready to retire and wanted to escape the cold Idaho winters that we experience here. We liked the St George area and it was close enough to home if we needed to come back for a day or two we could. We decided to build in Dixie Springs because it was close to a lot of different recreation and liked the neighborhood. We have a close family and when one plays all the kids and grandkids want to come and be apart of it too. We started our original home with American Heritage Homes in late spring of 2012. After interviewing several contractors I felt the most comfortable with Seth and Shem. They completed the home in excellent time and the workmanship and working relationship with them was excellent. Then, realizing after the first outing with our family we had under built and needed more bedrooms and room for the Grandkids, we needed to expand. I was able to buy the lot next to me and asked Seth and Shem to build me an addition onto the original home because we were so pleased with their work on the home. I was a general contractor in Idaho and have been involved in the construction industry for over 25 years. I new what I was looking for in a contractor. Most all contractors have the skills and ability to build and complete the project in a very acceptable manor. They might get to the finished product differently but they will get there never the less. It is the little things that separate Seth and Shem. The addition was very complicated because I did not want it to look like an addition. I wanted it to blend with the original home but yet I had certain ideas of what I needed. They walked with me from start to finish, starting with the design. Their input into the project was invaluable. There was constant communication with Shem during the construction process. He would always call me and ask if it was ok to proceed with a change if it became necessary, also I received several calls with him starting with, "Brion, I think we need to do this, or I really think it would look better if we did this, but always ending with I will do whatever you want. This and many other little things that go unnoticed is what made me so happy with them. Again, their ability to perform the work and their Honesty in their dealings is a fresh and unusual part of the construction industry. My wife Deanna summed it up in one sentence. "THEY ARE AWESOME." I would be glad to visit with anyone who has questions or is seriously considering American Heritage Homes for their next project, Seth or Shem have my number.

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    Brion Egan2012 Homeowner and 2013 Addition Renovation