How Much Equity Do You Need to Move?
Understanding your equity is the single most important step in deciding whether to move. It determines what you can afford, whether you can buy before you sell, and what your net proceeds will look like.
What Is Equity?
Equity is simple: your home's current market value minus what you owe on your mortgage. If your home is worth $450K and you owe $200K, you have $250K in equity. That equity is real money — but not all of it ends up in your pocket.
What Reduces Your Net Proceeds
- Agent compensation (typically 5–6%)
- Closing costs (typically 1–3%)
- Outstanding mortgage payoff
- Potential repair credits or concessions
- Any liens or outstanding debts on the property
The Equity Threshold for Moving
There's no single magic number, but as a general guideline, you need enough equity to cover your selling costs plus a down payment on your next home. If you're looking at a $500K home and need 10% down, that's $50K — plus your closing costs and compensation on the current home.
What If You Don't Have Enough Equity?
You still have options. You might be able to sell and rent temporarily, do a lease-purchase on your next home, or wait for appreciation to build more equity. The key is knowing your real numbers before you make any decisions.
Frequently Asked Questions
How much equity do I need to move?
There is no single number, but as a rule of thumb you want enough equity to cover your new down payment, closing costs, and the sale costs on your current home. Many lenders look for at least 20% equity to support bridge or HELOC strategies, though programs vary.
Can I move with less than 20% equity?
Yes, if you are selling and buying in the same transaction. Standard financing for the new home works with 3.5% to 5% down, and your sale proceeds cover the rest at closing. The 20% figure matters more when you want to buy before you sell and need the equity as leverage.
What is loan-to-value and why does it matter?
Loan-to-value (LTV) is your mortgage balance divided by your home's value. Lower LTV means more equity, which usually means better rates and more refinancing or borrowing options. Knowing your LTV tells you how much financial flexibility your home actually gives you.
How do I find out how much equity I have?
Start with a realistic current value of your home, not what you paid for it. A local agent's comparative market analysis is free and accurate, and your lender can confirm how much you can access. Equity moves with the market, so the number you had two years ago is not the number you have today.
Find Out Your Real Number
I'll provide a detailed equity analysis that shows you exactly where you stand — your home's current market value, your estimated payoff, selling costs, and net proceeds. No guesswork.
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