Negative equity is not common, but occurs when the value of your home falls below the loan amount outstanding on that collateral. This can happen when a home or neighborhood is not taken care of. For example, if the appraised value of a house is lower than the amount owed on the house, the borrower is said to be in a state of negative equity.

Pay off or consolidate unsecured debts like student loans and personal loans. Pay down or pay off high interest loans, such as credit cards and vehicle loans. Invest using your equity for a higher return. Remodel or add on to your current home. Some retirees use Home Equity Lines of Credit for additional income. Refinancing down the road can provide limitless opportunities to use your equity.

There are a lot of changes you can make to increase the value of your home without spending much money. Paint rooms, ceilings, outdated cabinets and trim. Upgrade the trim in your living room, master bedroom or foyer to crown molding. Update your bathroom and/ or kitchen hardware. Update your Kitchen appliances. Paint your front door and shutters. Add fresh mulch to your landscaping. Update the curtains and blinds throughout your home. Build a deck or fence to create an outdoor liveable space.