3 Home Financing Options When You Need Money Now
If you need to access the equity in your home, you have three main options: home equity loan, cash-out refinance, or selling your home outright. Each option has its own pros and cons, so it’s important to compare and contrast before making a decision.
Home Equity Loan
With a home equity loan, you borrow a lump sum of money and make fixed monthly payments. This is a good option if you need a large amount of money all at once and you want predictable monthly payments. However, home equity loans often have higher interest rates than other types of loans, so you’ll need to be sure you can afford the payments.
With a cash-out refinance, you replace your existing mortgage with a new loan for more money than you currently owe. This allows you to access the equity in your home and get cash in hand. Cash-out refinances typically have lower interest rates than home equity loans, but they also come with closing costs. This is a good option if you want to lower your monthly payments or you need a large amount of cash.
Selling Your Home
If you need to access the equity in your home but you don’t want to take out a loan, you can always sell your home outright. This is a good option if you need a large amount of cash and you don’t want to make monthly payments. However, selling your home can be a long and stressful process.
No matter which option you choose, be sure to do your research and compare interest rates, fees, and terms before making a decision.