Smart Ways To Grow Home Equity In Colorado Springs

PMI, solar contracts, kitchen upgrades, neighborhood choice: they can either grow your home equity or quietly drain it. We sit down with Lori Thompson, a RE/MAX Properties broker and longtime Colorado Springs realtor, to answer a question we hear nonstop: how do you build equity faster without making expensive mistakes?

We start with the clearest lever most homeowners control today: paying down principal. Lori explains how small, consistent extra payments can move you toward 20% equity faster, which is often the turning point for removing PMI on a conventional mortgage. We also talk through FHA MIP and why refinancing into a conventional loan may be the only real path to dropping mortgage insurance once you’ve built enough equity. If you want a strategy that works whether the market is hot or uncertain, this part is for you.

Then we get blunt about what not to do, especially if you’re on a military PCS timeline of 3 to 5 years. Lori shares why certain solar panel contracts can act like a lien, create a gap between cost and appraised value, and make selling harder in a hail-prone state. From there, we shift into upgrades with real ROI like fresh paint, durable LVP flooring, and targeted kitchen and primary suite refreshes, plus how to avoid over-improving for your neighborhood by checking local comps and getting honest guidance.

If you’re trying to grow home equity in Colorado Springs through smarter mortgage choices, better renovations, and stronger neighborhood fundamentals like safety, schools, and walkability, you’ll leave with a clear plan. Subscribe for more real-world real estate advice, share this with a homeowner friend, and leave a review with your biggest equity question.

To learn more about RE/MAX Properties Inc. visit:
https://www.LoriThompson.REMAX.com
RE/MAX Properties Inc. 
Colorado Springs 
719-332-1807 

Transcript

Why Equity Matters

SPEAKER_01 0:03

Welcome to your Colorado Springs life at home, where real estate meets real talk and maybe a little too much coffee. Hosted by Remax Properties licensed realtor broker and top producer Lori Thompson, a local legend who's been helping military families and civilians buy and sell homes for over 40 years. Whether you're PCSing, upsizing, downsizing, or just daydreaming, Lori's got you covered. Why? Because she's your lifetime realtor. And she actually answers her phone. Imagine that.

SPEAKER_02 0:45

Equity isn't just a number on paper. It's one of the most powerful tools homeowners have. And today we're breaking down how to grow it with intention. Welcome back, everyone. I'm Frederick, co-host and producer in the studio with Remax Properties licensed realtor and broker, Lori Thompson. Lori, hope your day's been treating you well so far.

SPEAKER_00 1:06

It has, but the day's not over, so you never know what'll happen.

SPEAKER_02 1:10

That's right. So, Lori, uh, today's question is how can I build equity faster in my home? What are the most effective strategies that you recommend?

Pay Principal To Drop PMI

SPEAKER_00 1:19

It's interesting because the way a lot of people buy a home is with a conventional mortgage. And a conventional mortgage, if you put less than 20% down, you pay something called PMI, and that's private mortgage insurance. Now, if you finance a home FHA, you pay something called MIP, which is mortgage insurance premium. But they kind of work the same way. So one of the best ways that you can build equity, let's go back to our first scenario with a conventional mortgage. You did not put 20% down when you bought it. You are paying several hundred dollars a month towards that PMI. If you begin to prepay the principal on your loan, and there's some really easy strategies, you could just apply an extra $100 a month towards the principal. If you can afford more, that's even better. But if you start applying a regular, consistent monthly payment to prepay your principal, you're beginning to build that equity as you lower your loan balance. Once you get to that magic 20% number, you can get rid of that PMI. And let's say our PMI is like $300 a month, but you are used to making that payment. At that point, you can keep the same payment and start applying $300 a month towards your principal. It's utterly amazing how quickly that can help you build equity because most people will take out a 30-year mortgage. I have usually with my own personal mortgages, I've cut them in half just by prepaying the principal. Now I do longer-term ownership. So I'm always aware that the market will go up, the market will go down, there's no guarantees on future equity. But long term as an investment, real estate always pays off. So that's the first trick is to if you're not putting 20% down up front, reduce your principal so you can get to that sweet spot and get rid of that PMI. Unfortunately, with FHA, you have to refinance it because that just stays with the loan. So once you get that 20% equity position, refinance it into a conventional mortgage. Now I can tell you how not to build equity.

Solar Loans That Drain Equity

SPEAKER_00 3:40

And I work a lot, as we've discussed before, I work a lot with the military population. Typically, they will be here three to five years max. And one of the biggest heartaches is when I tell people that they were not told the entire truth. A lot of my clients will enter into a solar panel contract. I try to tell them repeatedly, and I think I'll just post a notice somewhere. If you are not going to be in your house for 15 to 20 years, that will not be a good investment. It will eat up your equity that you're building. It's almost like it'll put you in a reversed position because it does become a lean against the property. A lot of the solar salespeople will say, oh, well, here's what you do to demonstrate your enhanced property value. And it's not accurate information. So if I were to go out right now and put a $30,000 solar system on my house, I might increase my home value by $4,000. We now have a $26,000 gap. And not only that, but Colorado is very prone to hail. And once the hail hits, everything starts all over again. Insurance claims are more difficult. So I am very much in favor of green energy. I just tell people, unless you're going to be here for 15 to 20 years, do not make that investment. And if you are going to be there long enough to pay off your solar loan, then your money ahead because you're not paying utility bills, you're just paying your monthly payment on your loan, your solar loan. And then once that's paid off, you're way ahead of the game. But if you're only going to be here for a few years, please don't do that because it really will suck that equity.

Upgrades With Real ROI

SPEAKER_00 5:26

As far as upgrades that give you the biggest bang for the buck, fresh paint, always, always makes a difference. Updating kitchens is really a good idea. Just don't go too overboard depending on your price point. A refresh never hurts a home. So I would say paint, carpet, kitchen, master. Those are the areas that you really want to focus in to help build your equity. And if you do that kind of strategy and at the same time you're prepaying the principal on your mortgage, then you can end up in a really good position.

SPEAKER_02 6:04

Wow. Your response was packed with so much value there. Thank you. Just a quick follow-up. You talked about, you know, re-remodel the kitchen perhaps, but don't go overboard. You said something like that. So my question is, how can homeowners avoid over-improving for their area?

Avoid Over-Improving Your Area

SPEAKER_00 6:21

What you really have to look at is you have to look at your general area, and it's a really good idea to touch base with your realtor. Appliances, you would not believe the spectrum of appliances. You can get a basic stove for a few hundred dollars to something deluxe that will probably sing you awake in the morning and you can spend thousands of dollars. You have to look at if I'm going to be putting in deluxe custom-made cabinetry, and I'm going to be putting my thermidor stove and I'm going to put in top of the line granite, quartz, whatever it is, and I'll build a waterfall. Make sure that your neighborhood holds that value. Best example I can give you is right around the corner from me. Um, there is a gentleman there, uh, and uh he wasn't my client. It was fine. Uh, he put his house on the market and he pulled it back off. And what he did is he put in a glorious outdoor seating area with a waterfall. He was a contractor, and so he over-improved his home for the neighborhood, and then he listed it about $200,000 higher than the average sales price in this area. So you really have to pay attention to look at my neighborhood. Now, if you are in a custom development with a custom home and they are over a million dollars, then look at the kitchens nearby. And if you're doing a refresh, you can go a little bit more extravagant. But uh, if you are in a different type of neighborhood, talk to your realtor and say, hey, what would be a good investment or a bad investment? And hopefully you have a realtor who picks up the phone. Number two, you have a realtor who will have uh the names and phone numbers of some contractors that they might have had good luck with or know different ways to be cost effective, but they can tell you, okay, that might be too much for this area. So that's the most important thing.

SPEAKER_02 8:19

Yeah, open communication with a good realtor is definitely important at sound. So thank you so much for that.

Neighborhood Factors That Hold Value

SPEAKER_02 8:26

So, speaking about neighborhoods, how does choosing the right neighborhood influence long-term equity growth?

SPEAKER_00 8:33

You know, it's really hard to predict. And I've told you before that my my crystal ball shattered in the late 80s. What you look at is you look at the safety, look at the schools, even if you don't have children, a good school district will pull up your home values. They use there's one factor they use. Uh, it's called a walk score. But how close are you to transportation? How close are you to shopping? How close are you to medical or where you're going to be working? But then again, you have people who want to be out in the boonies where they don't really care to be close to anything. Um, so that's individualized. But I would say the primary factors are is it a safe neighborhood? Drive around, look at how the neighbors are taking care of their yards and their cars. Uh, that's really a good indication of how they're taking care of their homes because pride of ownership doesn't stop at the house. And then a really good school district that's that will help you maintain the upward trajectory on home valuations.

SPEAKER_02 9:41

Wonderful, wonderful. Thank you for those tips. So, one uh in closing, if you wouldn't mind, uh, what is one simple change that a homeowner can make this year to boost equity?

Simple Equity Boosts This Year

SPEAKER_00 9:53

Paint. And don't go with crazy colors. Uh, look at different trends. I think it's a good idea to tour model homes, although you may end up deciding to move into a new construction. But uh I like to tour model homes or look at pictures online, um, and you'll get a better idea on what's a good paint color and what's a bad paint color. So a refresh with paint is excellent. I also like LVP flooring instead of carpeting. So LVP stands for luxury vinyl plank flooring. Very durable. If you're like me and you always have to have a critter running around somewhere, it's a very durable product. And one tip I can give you, unless you really want the richness of dark colors, when you put in dark flooring, it will show every speck of dust, it will show every piece of lint. So, really dark wood flooring will be a lot more maintenance, which is fine. If you're OCD and you love to clean, that is the color for you. But if you go to a medium to a light colored flooring, that is a really good choice. And I like LVP over carpeting.

SPEAKER_02 11:07

Wonderful, wonderful. Well, thank you so much, Lori. Uh, building equity is a smart long-term strategy, and your recommendations and tips make it feel achievable for every homeowner. So I appreciate you. I appreciate you taking the time to share your knowledge and expertise with us. Everyone tuning in, thanks so much for joining, and we will see everyone next time.

SPEAKER_00 11:27

Alrighty.

Wrap-Up And How To Reach Lori

SPEAKER_01 11:32

That's a wrap for this episode of Your Colorado Springs Life at Home. Got questions? Need advice? Just want to talk about interest rates and rent a countertop? Call or text Lori at 719-332-1807. Yes, she'll really respond. Or visit Laurethompson.remax.com to get started with your lifetime realtor. Because when it comes to Colorado real estate, Maury doesn't just know the market, she is the market.