If you’ve been in your Sacramento Area home for a while—whether it’s in East Sac, Land Park, or the surrounding suburbs—you might have built up more equity than you realize. 

But are you making the most of it? 

Home equity is the difference between what your home is worth and what you owe on your mortgage, and it’s a powerful financial tool. Whether you're thinking about a home renovation, consolidating debt, or even funding a big life event, your home’s value can work for you in ways you might not have considered.

At The Sherri Patterson Team, we believe your home is more than just a place to live—it’s a valuable asset that can help you achieve financial freedom. That’s why we’re breaking down smart ways to use your home equity, from refinancing to eliminating PMI, so you can make the best choice for your future.



Here are a few ways to tap into your home’s equity:

Home Equity Line of Credit (HELOC)

A HELOC is a flexible credit line that allows you to borrow against your home’s equity as needed. Unlike a home equity loan, a HELOC works more like a credit card, giving you access to funds over time rather than in one lump sum. This is a great option for ongoing expenses, such as home improvements or emergency funds, but be mindful that interest rates can fluctuate.

Cash-Out Refinance

A cash-out refinance replaces your existing mortgage with a new one for a higher amount, allowing you to take the difference in cash. This can be a smart move if you need funds for major expenses and can secure a lower interest rate in the process. However, since this increases your loan balance, it’s essential to ensure the new terms align with your financial goals.

Use Your Home Equity to Eliminate PMI

Private mortgage insurance (PMI) is an added cost that protects lenders, not homeowners. If you originally put down less than 20% on your home, you’re likely paying PMI each month. The good news? Once you’ve built up at least 20% equity, you can remove PMI by refinancing or requesting lender approval. Using your home equity strategically can save you hundreds of dollars per year by eliminating this extra fee.

Home Equity Loan

A home equity loan allows you to borrow a lump sum against your home’s value, typically at a fixed interest rate. This option is ideal for major expenses like home renovations, debt consolidation, or even funding educational costs. Since the loan is secured by your home, interest rates are often lower than personal loans or credit cards. Just keep in mind that missing payments could put your home at risk.

Reverse Mortgage

For homeowners aged 62 and older, a reverse mortgage offers a way to tap into home equity without monthly payments. Instead of making payments, the loan balance grows over time and is repaid when the home is sold or when the borrower moves out permanently. This type of loan can provide financial relief by covering medical expenses, supplementing retirement income, or even paying off an existing mortgage to reduce monthly expenses.

How much have Sacramento homes appreciated?

Sacramento home prices have risen by about 2% over the past year, making it a solid market for homeowners looking to build wealth. Experts predict average appreciation will continue to climb steadily throughout the year, building on the equity your home has already accumulated. Also, demand continues to be strong due to the city’s proximity to the Bay Area, thriving job market, and fantastic quality of life. From the vibrant Midtown scene to the relaxing American River Parkway, Sacramento remains an amazing place to call home.

How do you calculate your home’s equity?

Understanding your home equity starts with a simple calculation: subtract your outstanding mortgage balance from your home’s current market value. For example, if your home is worth $400,000 and you owe $250,000, you have $150,000 in equity. Knowing this number is essential for determining your borrowing power and financial options.

There are several ways to estimate your home’s value. You can use online valuation tools, check recent sales of similar homes in your neighborhood, or consult our team for a more accurate assessment. If you’re planning to use your home equity, having a precise valuation will help you make informed decisions about loans, refinancing, or selling your home.

Your home equity isn’t just a number—it’s an opportunity. Whether you’re looking to make home improvements, invest in your future, or free up some extra cash, there are plenty of ways to put your equity to good use. Sacramento’s real estate market has seen steady appreciation, making now a great time to explore your options.

If you’re curious about how much equity you’ve built up or want to discuss your best financial move, let’s chat! The Sherri Patterson Team is here to help you navigate your home’s hidden wealth and make decisions that support your goals.