Your home is a source of generational wealth. A good mortgage specialist will be a lender for life, helping you make the best mortgage decisions to grow or leverage your equity to ensure your financial future is secure.
As life changes, so can your mortgage.
If you have equity in your home, you can tap into it when you need funds to cover expenses such as home improvements, debt consolidation, education expenses, or medical bills. If you’re interested in selling your home, your home equity can be used for that too!
Let’s dive into some options available at Equity Resources:
Cash-Out Refinance
With a cash-out refinance, you can access your home’s equity through a first mortgage instead of a second mortgage. It essentially replaces your current mortgage. A cash-out refinance is a good option when you are looking to consolidate debt.
Home Equity Line of Credit (HELOC)
HELOCs function more like a credit card where the lender extends a line of credit for an amount based on the equity in your home. Then you can access those funds as needed, instead of getting a lump-sum payment. You can use what you need and once you pay off the balance, the loan is over.
Home Equity Loan
A home equity loan is a second mortgage that allows you to borrow against your home’s equity and receive funding in a lump sum. Like most loans that allow you to tap into your equity, you will generally be required to keep at least 20% equity in your home. Unlike a cash-out refinance, home equity loans don’t replace your mortgage, which is beneficial if you have a low first mortgage interest rate and don’t want to change it by refinancing.
Bridge Loans
If you’re looking to purchase a new home, your current equity could be used to help here too! A bridge loan is short-term financing that moves your equity to a 2nd lien so you can use it towards your down payment, avoiding the need to be contingent when negotiating for your new home.
There are so many options that can be presented to you, and the best part is it is free to explore these options with your trusted mortgage specialist.
Talking to your mortgage specialist regularly about your changing needs is important as they can offer creative solutions. You may not realize all the ways you can leverage your mortgage to ensure a secure financial future for you and your family!