Understanding One of the Most Common Questions Growing Families Ask

By The K Group Real Estate

If you've ever looked around your house and thought,

"We've outgrown this place..."

...you're not alone. As families grow, their needs change. Children need bedrooms, parents begin working from home, and storage becomes harder to find.

Eventually, many homeowners begin wondering if it's time for a larger home. Then another thought usually follows.

"We'd love to move...but can we actually afford it?"

The answer often depends on one thing:

How much equity you have in your current home.

The good news?

Many homeowners have more equity than they realize. Let's walk through what equity is, why it matters, and how it can help make your next move possible.

What Is Equity?

Let's keep this simple.

Imagine your home is worth $350,000. Now imagine you still owe $240,000 on your mortgage. The difference between those two numbers is your equity.

In this example:

Home Value

$350,000

Minus

Mortgage Balance

$240,000

Equals

$110,000 in Equity

Think of equity as the portion of your home that you actually own. Every mortgage payment you make usually increases your ownership a little. Then, as your home's value increases over time, your equity can grow even faster.

Why Does Equity Matter?

Because equity often becomes the money that helps you buy your next home. When you sell your current house, the mortgage is paid off first. The remaining money, after paying certain selling expenses, belongs to you.

Many homeowners use those funds for:

• The down payment on their next home

• Closing costs

• Moving expenses

• Renovations after they move

• Paying down the mortgage on the new home

Without understanding your equity, it's difficult to know what options you really have.

How Much Equity Do You Need?

This is where many homeowners expect a simple answer.

Unfortunately...

There isn't one.

Some families move with very little equity. Others wait until they've built much more. It depends on several things.

For example:

• The price of the next home

• Your income

• Your monthly budget

• Current mortgage rates

• Your down payment goals

• How much you still owe on your current home

Rather than asking,

"How much equity do I need?"

A better question is,

"How much equity would make my next move comfortable?"

Those are two different conversations.

Do I Need a 20% Down Payment?

Probably not.

This is one of the biggest misconceptions in real estate. While putting 20% down has advantages, many buyers purchase homes with less. Far far less.  In fact, I have personally purchased several homes with nothing down. 

Depending on your loan program and financial situation, there may be options that require a smaller down payment.  That's why it's important not to assume you're years away from moving simply because you haven't saved 20%.

Every situation is different.

For those who qualify for the VA Home Loans, you are not required to put any money down.  Additionally, the USDA loans are the same. The difference in the two programs are the VA Home Loans are for those who have serveved in the military, and USDA loans are restricted to certain areas, such as Elizabethtown isntead of Radcliff.  

Other loans, such as the FHA Home Loan is open to everyone and in all locations.  The only requirement is that the home is move in ready as this is an owner occupied loan.  

And what about the conventional loans that everyone has heard require 20% down? Gone are those days.  Now, you can use a conventional to purchase a home with as 5% down, allowing you to get into a home with much less money.

What Happens If I Don't Have Enough Equity?

That doesn't necessarily mean you're stuck. You still have options.

You might decide to:

• Stay another year and continue building equity.

• Make improvements that increase your home's value.

• Purchase a less expensive home than you originally planned.

• Adjust your budget.

• Explore different financing options.

• Look for homes in a less expensive area.

Sometimes waiting is the smartest decision. Sometimes it isn't. The important thing is making that decision based on facts rather than assumptions.

Should I Wait for My Home to Be Worth More?

Maybe. Maybe not. It's tempting to think,

"If I wait another year, my house will be worth more."

That could happen. But remember...

The home you're hoping to buy may also increase in value. Waiting doesn't always improve your position. The only way to know is by looking at both sides of the equation.

Don't Forget About Selling Costs

One mistake many homeowners make is assuming every dollar of equity ends up in their pocket. When you sell a home, there are expenses involved.

These may include:

• Real estate commissions

• Closing costs

• Mortgage payoff

• Taxes or prorated expenses

• Possible repairs requested during the sale

Understanding these costs helps create a realistic picture of how much money you'll have available after closing.

The First Step Isn't Looking at Houses

Most people start their home search by opening Zillow or similar sites. We think there's a better first step.

Find out:

• What your home is worth.

• How much you owe.

• Approximately how much equity you've built.

• What your monthly payment might look like on your next home.

Once you understand those numbers, the rest of the decision becomes much clearer.

Are you unsure? Schedule a no obligation consultation now to discuss your equity.

📌 Key Takeaways

✓ Equity is simply the difference between what your home is worth and what you still owe on your mortgage.

✓ Many homeowners have built more equity than they realize which makes moving more feasible.

✓ Equity often becomes the money that helps fund the purchase of your next home.

✓ There isn't a specific amount of equity that every family needs before moving.

✓ Understanding your home's value is one of the best first steps in deciding whether moving makes financial sense.

💡 Brian's Perspective

I've noticed something interesting over the years. Many homeowners spend months looking at homes online before they ever find out what their current home is worth.

It's understandable. Looking at homes is exciting. Running numbers isn't.

But here's the truth.

Until you know how much equity you've built, you're making decisions with only half of the information. I've met families who were convinced they couldn't afford to move.

After we looked at their home's current value and the equity they had built, they realized moving was much more realistic than they thought.

I've also met homeowners who discovered waiting another year was the wiser financial decision.

Both outcomes are good outcomes. The goal isn't to convince you to move today. The goal is to replace uncertainty with information. Once you understand your options, making the right decision becomes much easier.

➡️ Continue Your Research

Learning how much equity you've built is only one piece of planning your next move. These resources can help you continue exploring your options.

Start Here

🏡 Have You Outgrown Your Home? The Complete Guide for Growing Families

Explore our complete resource center designed to help growing families decide whether it's time for their next home.

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Ready to Understand Your Options?

You don't have to guess how much equity you've built. We can help you estimate your home's current market value, explain what those numbers mean, and discuss how they could affect your next move.

Whether the best decision is moving this year, waiting another year, or staying where you are, our goal is the same. To give you the information you need to make a confident decision for your family.

Schedule a call with The K Group Real Estate and let's build a plan for your next chapter.