# How Does Owning a Home Build Wealth? Canonical URL: https://valor.mortgage/answers/how-does-owning-a-home-build-wealth/ Page title: How Does Owning a Home Build Wealth? | Valor Mortgage By [Christopher Armantrout](https://valor.mortgage/about-us/), Licensed Mortgage Loan Originator · NMLS [#1210804](https://www.nmlsconsumeraccess.org/EntityDetails.aspx/INDIVIDUAL/1210804) Last updated November 5, 2026 Rules accurate as of November 2026 Quick answer A home can build wealth in two main ways. Each payment reduces what you owe, which builds equity, and the home may gain value over time. A fixed-rate loan also keeps your principal and interest steady, which helps you plan. It’s not guaranteed, though. Home values can fall, owning has real costs like maintenance, and borrowing against your equity adds debt secured by your home. Rules on this page were checked on November 5, 2026 against CFPB information. This is general information, not financial advice. Program terms are subject to agency and lender guidelines and may change, and individual lenders can set stricter rules. ## Homeownership and long-term wealth February 23, 2026 · 35 seconds · [Watch on YouTube](https://www.youtube.com/shorts/gqZ5h7ReITM) **Transcript:** Why is home ownership the first step in generational wealth? The first step is because you're building equity in an asset. As time progresses, you're building more and more of that equity to be able to either pull equity out of for paying for college or pulling equity out for paying for anything else that your family may need in the future. But also, you're providing an opportunity for a consistent housing expense. Consistent housing expense over a long period of time enables you to be able to plan financially for your family. If you have any future questions, feel free to give me a call so that when you do buy, you buy with confidence and you buy with Valor. Home values can fall as well as rise, and borrowing against equity adds debt. A fixed-rate payment can still change with taxes and insurance. This is general information, not financial advice. ## Where does equity come from? | Source | How it works | Keep in mind | |---|---|---| | Your down payment | It’s your starting equity | With 100% financing, you may start with little or none | | Paying down principal | Each payment reduces your balance | Early payments are mostly interest, so it starts slowly | | Rising value | If the home gains value, your equity grows | Values can fall as well as rise, and vary by area | | Improvements | Some projects can add value | Few repay their full cost | General information, not financial or investment advice. Past home price changes don’t predict future results. Your equity is simply the home’s value minus what you owe, which is the flip side of [loan-to-value](https://valor.mortgage/answers/what-is-loan-to-value/). ## Why does a steady payment matter? In the video, Christopher talks about a consistent housing expense making it possible to plan for your family. On a fixed-rate loan, your principal and interest stay the same for the life of the loan. Rent can change at each renewal. Be realistic, though: property taxes and insurance can still push your [total payment](https://valor.mortgage/answers/what-is-included-in-a-mortgage-payment/) up. ## What are the costs and risks? - **Upfront costs:** a [down payment and closing costs](https://valor.mortgage/closing-costs-vs-down-payments/) - **Ongoing costs:** taxes, insurance, maintenance and repairs - **Selling costs:** commissions and fees can take a share of your equity, especially if you sell soon after you buy - **Less flexibility:** it’s harder to move quickly, and your money is tied up in one asset - **Loss of your home:** falling behind can lead to foreclosure ## How can you use your equity? Christopher mentions paying for college as one example. You can get to equity through a [cash-out refinance](https://valor.mortgage/cash-out/), or through a [home equity line of credit](https://valor.mortgage/what-is-a-home-equity-line-of-credit-heloc/), which is offered by banks and credit unions rather than Valor Mortgage. On [WSGI’s One Street Over](https://valor.mortgage/podcasts/one-street-over-wsgi-2026-10-19/), he compares these options. [Hear it from 8:01 in the episode](https://valor.mortgage/podcasts/one-street-over-wsgi-2026-10-19/). Remember that borrowing against equity adds debt, secured by your home, and reduces what you could pass on. ## What about passing a home to your family? A home can be a lasting family asset, but it depends on keeping up the loan and the property, and on your estate planning. For questions on wills, taxes or transfers, talk with an attorney or a tax professional. ## Home equity FAQ ### How long does it take to build equity? It depends on your down payment, your loan term, your payments and local values. Paying extra toward principal or choosing a shorter term builds it faster. See [how to pay off your loan sooner](https://valor.mortgage/answers/how-can-i-pay-off-my-mortgage-faster/). ### Is buying always better than renting? No. It depends on how long you’ll stay, what you can afford and what else you would do with the money. Renting can be the right choice for a time. See [buying now or waiting](https://valor.mortgage/answers/should-i-buy-a-house-now-or-wait/). ### Do home values always go up? No. They can fall, sometimes for years, and they vary by area and by home. Don’t buy on the assumption that prices will rise. ## Where these rules come from | Rule or figure | Source | As of | |---|---|---| | Loan-to-value and equity | [CFPB, loan-to-value ratio](https://www.consumerfinance.gov/ask-cfpb/what-is-a-loan-to-value-ratio-and-how-does-it-relate-to-my-costs-en-121/) | Nov 5, 2026 | | Escrow, taxes and insurance | [CFPB, escrow accounts](https://www.consumerfinance.gov/ask-cfpb/what-is-an-escrow-or-impound-account-en-140/) | Nov 5, 2026 | ## Related answers and guides - [Should you buy a house now or wait?](https://valor.mortgage/answers/should-i-buy-a-house-now-or-wait/) - [What does loan-to-value mean?](https://valor.mortgage/answers/what-is-loan-to-value/) - [How can you pay off your mortgage faster?](https://valor.mortgage/answers/how-can-i-pay-off-my-mortgage-faster/) - [More answers on buying a home](https://valor.mortgage/answers/#buying). - [About Christopher Armantrout](https://valor.mortgage/about-us/). [Call me at (615) 671-9178](tel:+16156719178). That’s the fastest way to get a straight answer on what you’d qualify for and how buying could fit your long-term plans. If it’s after hours, [grab a time on my calendar](https://valor.mortgage/book-your-appointment/). Pick a slot that works and I’ll call you then. If your life is too chaotic for a phone call right now — I understand — [start an application](https://valor.mortgage/purchase/) and I’ll review it and reach out with a plan. About the author [Christopher Armantrout](https://valor.mortgage/about-us/) Owner & Senior Loan Officer, Valor Mortgage NMLS #1210804 Christopher is a licensed Mortgage Loan Originator in the State of Tennessee and has been originating home loans since 2015. He founded Valor Mortgage in Springfield in 2019 and works with veterans, first-time buyers, self-employed borrowers, and families across Robertson County and Middle Tennessee. [More about Christopher](https://valor.mortgage/about-us/) [Verify this license on NMLS](https://www.nmlsconsumeraccess.org/EntityDetails.aspx/INDIVIDUAL/1210804) **Valor Mortgage, LLC** · Christopher Armantrout, Mortgage Loan Originator, NMLS #1210804 · Valor Mortgage, LLC is powered by Encore Lending Group, LLC, NMLS #1249911 · Licensed in Tennessee · Equal Housing Opportunity 724 S Main St, Springfield, TN 37172 · (615) 671-9178 · christopher@valor.mortgage · [NMLS Consumer Access](https://www.nmlsconsumeraccess.org/EntityDetails.aspx/INDIVIDUAL/1210804) The dollar figures on this page are illustrative examples for general information only and are not an offer, a rate quote, or a commitment to lend. Actual interest rates and APRs vary based on loan program, borrower qualifications, property, market conditions and other factors. Program fees, limits and terms are set by the agencies named above and change without notice; all loans are subject to credit approval, income verification and property appraisal. Not all applicants will qualify. --- ## Contact Valor Mortgage - Christopher Armantrout, Senior Loan Officer, NMLS #1210804 - Phone: [(615) 671-9178](tel:+16156719178) - Email: [christopher@valor.mortgage](mailto:christopher@valor.mortgage) - Office: 724 S Main St, Springfield, TN 37172 - [Book an appointment](https://valor.mortgage/book-your-appointment/) · [Apply online](https://valor.mortgage/purchase/) · [Contact page](https://valor.mortgage/contact-us/) Valor Mortgage, LLC is powered by Encore Lending Group, LLC, NMLS #1249911 ([NMLS Consumer Access](https://www.nmlsconsumeraccess.org/EntityDetails.aspx/COMPANY/1249911)). Christopher Armantrout, Loan Officer, NMLS #1210804. Licensed in Tennessee. Equal Housing Opportunity. All loan programs, rates, terms, and conditions are subject to change without notice. Loan approval is based on borrower qualification, credit review, income verification, and property eligibility. Not all applicants will qualify. Not a commitment to lend.