How to Build Home Equity

When you build equity, you build wealth. Shutterstock

Most people’s biggest asset is their home. And one of the benefits of owning a home is building equity. Equity is power. You can borrow against it or make a profit when you sell your home.

Building equity may seem elusive, but there are ways to do it. Some require a little discipline, while others depend on the market. Either way, building equity is possible.

How Home Equity Works

When you buy a house, ownership is shared with the lender. If you put 20 percent down on the home, you own 20 percent of the house, which is equity. As you make payments, your share of the ownership grows.