3 Ways to Use Your Home’s Equity
If you’re a homeowner, you have the option to tap into your home’s equity in order to get cash for certain purposes. Here are three ways you can do this:
1. Selling property outright
2. Getting a cash-out refinance
3. Getting a home equity line of credit (HELOC)
Let’s take a closer look at each option:
Selling property outright
If you sell your property, you’ll be able to receive the entire value of the sale in cash. You can then use this cash for any purpose you see fit. However, keep in mind that selling your property will mean that you no longer own it and will need to find another place to live.
Getting a cash-out refinance
A cash-out refinance allows you to take out a new mortgage loan for more than what you currently owe on your home. This difference will be given to you in cash, which you can then use for any purpose. Keep in mind that getting a cash-out refinance means extending the length of your mortgage loan, which could end up costing you more in interest in the long run.
Getting a home equity line of credit (HELOC)
A HELOC is essentially a revolving line of credit that is secured by your home equity. This means that you can borrow against your home equity up to a certain limit and then pay back what you borrowed plus interest over time. A HELOC can be a good option if you need ongoing access to cash but want the flexibility to only make payments on what you borrowed when you actually use the funds.
Each of these options has its own set of pros and cons that you’ll need to consider before making a decision. Be sure to speak with a financial advisor to learn more about tapping into your home’s equity and which option might be right for you.