Do You Know What You Can Do With Your Home Equity?
CASH OUT REFINANCE
This type of refinancing replaces your existing mortgage with a new home loan for more than your current loan amount - with the difference being the extra cash. Lenders will generally let you borrow enough to pay off your current mortgage and take out more cash, usually up to 80% of your home's value.
HOME EQUITY LINE OF CREDIT
A HELOC is another way to borrow against the value of your home. With a HELOC, you receive a line of credit usually 80% of your home's value, minus the amount of your current loan amount.
HOME EQUITY LOAN
With a home equity loan, instead of getting a line of credit that you can tap into as needed, you would receive a lump sum of money. A home equity loan could make sense if you don't want to do a cash-out refinance because you have a low-interest rate.
Before you "run to the bank," it is important to understand and weigh the pros and cons of each option, as well as your personal financial goals. If you're thinking about tapping into your equity, send me a message — I'd be happy to provide a free home equity assessment!