One method is to make extra principal payments to decrease the amount of your mortgage. This not only increases your equity, but it also decreases the amount of interest you will pay. Some mortgages build equity faster than other types. For example, a loan that is repaid over a 15-year term will allow you to build equity faster than will one that is paid off in 30 years. But, the monthly payments are higher on a 15-year loan. This makes qualifying for a loan more difficult. Another mortgage option is a 30-year mortgage with a biweekly payment plan. These loans enable you to build equity faster than you would with a conventional 30-year mortgage. However, not all lenders offer this payment option. Another way to build equity is to make improvements that add value.
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