How To Take Advantage of a Hot Real Estate Market Without Selling Your Home

With Zillow experts anticipating home values to grow 16.4% in 2022, homeowners can easily take advantage of this opportunity by leveraging their home's equity. 

Although selling your home is a great way to make money, you still may prefer your current home and its location, which can be motivation enough to stay. Instead, you can leverage the equity in your home to put more money in your pocket. 

Experts anticipate existing home sales to total 6.57 million this year, a 7% increase from last year. Here are three simple ways to leverage your home's equity to your advantage. 

Reduce Your Mortgage Payments

Lenders require private mortgage insurance (PMI) for those who plan to take out a mortgage with a down payment of less than 20% of the purchase price. The PMI protects the lender when borrowers can no longer make their monthly mortgage payments. 

Therefore, homeowners can reduce their mortgage payments by getting rid of the PMI. Typically, the PMI requirement automatically stops after the homeowner has at least 20% equity in the property. Home equity is calculated by subtracting the loan balance from the home's value.

For example, if the current market value of a home is $100,000 and the mortgage loan balance is $95,000, the homeowner owns 5% equity in the property:[($100,000 – $95,000) / $100,000].