Turning Equity Into Elbow Room: How Delaware, OH Families Can Use Their First Home to Buy Bigger

Equity: Your Secret Weapon for a Bigger Home 

If you bought your Delaware home a few years ago, there is a good chance it is worth more today, thanks to price growth and the fact that you have been paying down your loan. 

That gap between what your home is worth and what you owe is equity, and for many first-time sellers, it is the key to moving up into a larger home without emptying savings or retirement accounts. 

Let us unpack how that works in real life. 

What Is Equity in Non-Banker Language? 

Here is the simple formula: 

Estimated sale price – loan payoff – selling costs = Equity you can use.

Example: 

• Your home in Curtis Farms could likely sell for 380,000 dollars

• You owe 260,000 dollars on your mortgage

• You spend around 28,000 to 30,000 dollars on commission, closing costs, and prep 

  
  

Your approximate equity is 90,000 dollars. 

That 90,000 dollars can be used for: 

• The down payment on your next home 

• Closing costs on your purchase 

• Paying off small debts to strengthen your next pre-approval 

• A buffer for moving and initial updates 

Myth 1: “We Need 20 Percent Down for the Next House” 

Not necessarily. 

For many Delaware move-up buyers: 

• 5 to 10 percent down is common, especially if you are buying in the 450,000 to 650,000 dollar range. 

• Some programs allow as low as 3 percent down if you qualify. 

• If you are moving from Delaware City Schools into a higher-priced area like certain Olentangy neighborhoods, you may still be able to keep cash in savings while using part of your equity for the down payment. 

The key is not the percentage. It is what you are comfortable with and how your monthly payment fits your budget. 

Myth 2: “We Should Take Out All Our Equity” 

It can be tempting to say, “If we can get 90,000 dollars out, we should use all 90,000.” Instead, think in terms of buckets:

1. Down Payment Bucket Enough to get you a comfortable payment and strong offer.

2. Buying Costs Bucket Closing costs, inspection fees, appraisal, and so on.

3. Safety Bucket A few months of expenses plus a cushion for kid-and-life surprises. 

4. Project Bucket Money for immediate fixes in the new home such as a fence, paint, basement flooring. 

Using all your equity for the down payment and closing costs can leave you “house rich, cash poor,” which feels stressful with kids. 

Step by Step: How Delaware Sellers Turn Equity Into a Move-Up Home

Step 1: Get a Realistic Home Value Estimate 

Ask a local agent for a CMA based on current Delaware sales, especially in neighborhoods similar to yours such as Adalee Park, Carson Farms, Woodview Park, and others. Online estimates do not know if you finished the basement or replaced the roof. 

You will get: 

• A price range you can likely expect 

• A net sheet showing estimated payoffs and closing costs 

• A rough idea of how much equity would come back to you at closing 

Step 2: Talk With a Local Lender Early 

Before you touch equity, talk to a lender who understands Delaware and Delaware County. Ask: 

• What price range makes sense given our income, debts, and likely equity?

• How much do we really need down to be competitive at that price point?

• Are there programs that help with closing costs or PMI, private mortgage insurance? 

Step 3: Decide Whether You Will Sell First or Buy First

Your equity is “trapped” in your current home until you sell. You have two main paths:

1. Sell first, then buy. 

   1. Your equity shows up as cash at closing. 

   2. You use that cash for your new home’s down payment and closing.

   3. You may need temporary housing or a rent-back. 

2. Buy first using a bridge loan or home equity solution. 

   1. More complex and not right for everyone. 

   2. Sometimes makes sense if you have strong finances and do not want to move twice. 

Your agent and lender can walk you through what is realistic for your family. 

How Interest Rates Fit Into the Picture 

Rates matter, but they are not the whole story. 

If you are moving because: 

• You have more kids than bedrooms 

• You are working from home and sharing space with a toddler 

• You need a different school district 

then quality of life is part of the equation, too. 

A slightly higher rate on a house that fits your family can still be a good decision if:

• Your payment is reasonable for your budget 

• You can refinance later if rates drop 

• You have left yourself some savings cushion

  
  

Real Life Example: The Delaware Family With Two Kids and One Bathroom

Imagine a couple in Delaware City Schools with two kids sharing a hallway bathroom.

• Current home value: 340,000 dollars 

• Loan payoff: 240,000 dollars 

• Estimated selling costs: 24,000 dollars 

• Approximate equity: 76,000 dollars 

  
  

They decide to: 

• Use 40,000 dollars as a down payment on a 475,000 dollar home with a second full bath and a finished basement 

• Use 6,000 dollars for closing costs 

• Keep 20,000 dollars in savings 

  • Reserve 10,000 dollars for new flooring in the kids’ bedrooms and a fence for the dog 

They are not maxing out every dollar of equity, but they are also not moving in with zero cushion. 

Your Next Step: Know Your Numbers 

You do not need to become a mortgage expert. You just need: 

• A realistic home value range 

• A rough estimate of your equity 

• A plan for how much to use and how much to keep 

Once you know those numbers, you can confidently answer the big question:

“Can we actually afford the kind of home we want next, or do we need to adjust something?” 

If you would like a simple equity and move-up planning session tailored to your Delaware home and budget, that is exactly what I help families with. 

Start with a no-pressure equity review: https://www.julia-foss.com/contact