Learning about Home Equity

Learning about home equity is critical, especially when you are a homeowner. Home equity investment is the biggest investments most of us make and therefore, understanding it is critical. Understanding will lead us to proper usage of our home and the investment opportunities it presents. Here are a few fundamental tools to help get you started in the right direction:

How to Access

You could access your home equity in a number of different ways. The three most common ways to do so are a cash-out refinance, a home equity loan and a home equity line of credit. With a refinance, you basically get a completely new mortgage and just take the cash that makes up the difference between the value of the home and the mortgage balance. With both equity loans and lines of credit, you get a second loan for a certain amount of equity. A line of credit allows you to borrow the equity, as you may need it, instead of one lump sum.

Advantages of Equity

Mortgage loans are tax deductible. You can save money on your tax return and get the money you need. Another big advantage of using equity loans is that they allow you to consolidate high interest loans into one easy loan. This can save you money and hassle. 

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