The longer you live in your home, the more money it can potentially make.
You read that right. Your home can make you money. It’s called equity, and it’s simply a way to describe how much of your home you actually own as you’re paying off your mortgage.
The more equity you have, the more money you can get to afford a major repair, pay off lingering expenses, send your children to college or build a financial safety net when there’s an emergency.
How? With a cash-out refinance or home equity loan. These two clever strategies are surefire ways to turn your equity into money you can use for whatever you want or need. Discover how you can use these tools to your advantage and reap big benefits from your home’s equity.
Mortgage rates may continue to fluctuate, but that doesn’t mean you shouldn’t refinance. Rates are still historically low. Why not leverage the current rate environment to get a new mortgage and big payout at the same time?
You can do it with a cash-out refinance. It replaces your existing mortgage with a new, larger one, and then takes out the difference between the two loans in cash. That money goes straight to you, usually in a lump sum, with no strings attached.
The best part: there are no limits on how you use that money. Renovate your home. Consolidate your debt. Take an unforgettable vacation. The choice is yours.
Not only will you get money, you might also save it! Choosing a cash-out refinance could mean lower rates. Because funds from your refinance are secured by your home, rates tend to be lower than what you find with most unsecured loans. That could be a major win for you and your budget if you purchased your home a few years ago when rates were higher than they are today!
Got good or excellent credit? Great! You may qualify for a home equity loan!
Like cash-out refinances, home equity loans let you draw money from your equity in a lump sum. That money is yours to use how you want.
A home equity loan saves from having to get a whole new mortgage. Plus, new tax legislation lets you deduct interest on your home equity loan as long as you use the funds to “buy, build or substantially improve” your home.
Just remember, a home equity loan is a loan, and that means you have to repay it. The good news: they usually have fixed interest rates, meaning your rate and payments never change over the life of the loan. No matter how much interest rates overall may change, your loan’s rate stays the same!