What is a Home Equity Line of Credit or What is a (HELOC)? After you pay down your mortgage over time or, your house goes up in value, your equity stake may be large enough. Equity can be used to improve your financial standing. Many homeowners ask: how do I Tap into to my equity to pay off debts?, pay for home improvement costs or, most importantly, How do I refinance my house to get cash?
As a homeowner, your equity is your homes true value. With every mortgage payment you make, your equity in your home grows — and so does your ability to get cash.
Have you been paying down your current mortgage? Then you probably can borrow against your equity. So what can you do with it?
- How Does a Home Equity Loan work? This is a loan you take out in addition to your existing mortgage. It lets you borrow against your stake in the home in exchange for a lump-sum, one-time payment.
Often, you’re able to borrow up to 85% of your home’s appraised value, minus what you owe. Many homeowners use these for large expenses like tuition, medical bills or the down payment on an additional property. - What is a Home Equity Line of Credit or What is a (HELOC)?: A HELOC works like credit card, only without the sky-high interest rates. The equity in your home is used to create a line of credit that you draw from as needed.
HELOCs typically come with long draw periods (think decades) and are often used for ongoing expenses, like regular home improvements or maintenance. This method should allow you to borrow 75% to 80% of your home’s appraised value, minus what you still owe. - What is a Cash-Out Refinance? Refinancing essentially replaces your existing mortgage loan. You take out a new loan larger than the balance on your current one, and then keep the difference in cash to cover whatever expenses you’re facing.
You can typically borrow up to 80% of your equity with a cash-out refi. Some homeowners use the money to pay off debts or high-balance credit cards. - How Much Money Can I Get From Selling My Home? Selling your home is another way to get money from the equity in your home. To Find out how much you qualify to walk away with contact Marc Giles (917) 721-5415
Thinking of tapping into your equity or Just want to know your options?
