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    3 Ways Home Equity Can Have a Major Impact on Your Life

    There have been a lot of headlines reporting on how homeowner equity (the difference between the current market value of your home and the amount you owe on your mortgage) has dramatically increased over the past few years. CoreLogic indicated that equity increased for the average homeowner by $17,000 in the last year alone. ATTOM Data Solutions, in their latest U.S. Home Equity Report, revealed that 30.2% of the 59 million mortgaged homes in the United States have at least 50% equity. That doesn’t even include the 38% of homes that are owned free and clear, meaning they don’t have a mortgage at all.

    How can equity help a household?

    Having equity in your home can dramatically impact your life. Equity is like a savings account you can tap into when you need cash. Like any other savings, you should be sensible in how you use it, though. Here are three good reasons to consider using your equity.

    1. You’re experiencing financial hardship (job loss, medical expenses, etc.)

    Equity gives you options during difficult financial times. With equity, you could refinance your house to get cash which may ease the burden. It also puts you in a better position to talk to the bank about restructuring your home loan until you can get back on your feet.

    Today, there are 2.7 million Americans who are currently in a forbearance program because of the pandemic. Ninety percent of those in the program have at least 10% equity. That puts them in a better position to get a loan modification instead of facing foreclosure because many banks will see the equity as a form of collateral in a new deal. If you’re in this position, even if you can’t get a modification, the equity allows you the option to sell your house and walk away with your equity instead of losing the house and your investment in it.

    2. You need money to start a new business

    We’ve all heard the stories about how many great American companies started in the founder’s garage (i.e., Disney, Hewlett Packard, Apple, Yankee Candle, Keeping Current Matters). What we might not realize, however, is the garage (along with the rest of the home) supplied the start-up money for many of these companies in the form of a refinance.

    If you’re passionate about an idea you have for a new product or service, the equity in your home may enable you to make that dream a reality.

    3. You want to invest in a loved one’s future

    It’s been a long-standing tradition in this country for many households to help pay college expenses for their children. Some have tapped into the equity in their homes to do that.

    Additionally, George Ratiu, Senior Economist for realtor.comnotes:

    52% of Americans who bought their first home in 2020 said they got help with their down payment from friends or family. The number one lender? Their parents.

    It’s safe to assume a percentage of that down payment money likely came from home equity.

    Bottom Line

    Savings in any form is a good thing. The forced savings you can earn from making a mortgage payment enables you to build wealth through home equity. That equity can come in handy in both good and more challenging times.

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    John Lyons

    Tired of traveling week-in and week-out for his corporate job, John Lyons decided to start his own real estate business. Lyons could not have predicted how well his background would prepare him for a career in real estate. His journey has been a long and successful one. After graduating from Indiana University in 2001, he took a job selling copiers at Minolta Business Solutions. After building an impressive track record there, he was hired by BrainLAB, Inc. to sell image guides surgical systems. He quickly rose to become one of the top sales representatives for the company. Seven years later, he was hired by Midwest director of sales IMRIS, for their intraoperative MRI and integrated operating room solutions. Now he has a new outlet for his sales abilities: real estate. A Chicago Association of Realtors Top Producer and recipient of Baird and Warner’s Founder’s Club award for the past four years, Lyons had a record 2018, selling more than 11.7 million in real estate. This marked an 18 percent increase over his 2017 numbers. “I was able to accomplish this through daily prospecting and providing a high-level of service for my clients,” he says. In testimonials, his clients say he is patient, trustworthy, personable, knowledgeable, and professional. “Each and every client is so different,” he says. “It’s important to truly understand their needs so you can best serve them. Listening build trust, which is so incredibly important in our business.” A member of the Lakeview Chamber of Commerce, he assist clients in a variety of neighborhoods, including the Near North Side, Lincoln Park, Lake View, Uptown, Ravenswood, Logan Square, West Town, and the Loop. He is quick to admit the best education he has ever received was from his 6 years of service in the United States Marine Corps. Lyons donates $200 per transaction to the Neonatal Intensive Care Unit at Lurie Children’s Hospital. “I am running the Chicago Marathon in 2019 for Lurie Children’s Hospital,” he says. “I have a lofty goal this year, to qualify for the Boston Marathon a second time. Since the beginning of the year, I have been spending at least four hours a week training for the October 13 race.” Results matter, here are John's Listing Numbers: Average list to sell ratio - 98.2% Average days to closing - 52 Listings taken to listings sold - 99%

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