Thinking about using some of your equity?
Which way is best?
Looking to tap into your equity? There are several options and
a few things to consider when deciding what is right for you.
If the interest rate on your mortgage is higher than current rates,
it may make better sense to refinance and take a lump sum of cash
from your equity. You'll simply refinance your mortgage to a larger
loan amount and take the difference in cash.
Home Equity Loan
This is essentially a second loan with a fixed interest rate that
you take out in addition to your first mortgage. Commonly referred
to
as a "second mortgage," a home equity loan allows you to tap
into
your equity to get cash without refinancing your first mortgage
and usually in a lot less time. A home equity loan is a good
choice if you'd like your cash in a lump sum and have a great
rate on your first mortgage.
Home Equity Line of Credit
This is very similar to a credit card except that it uses the equity
in your home as the revolving line of credit. You pay only if
and
when you use the money. The payment is interest only for 10
years. But, unlike credit cards, the interest is usually tax
deductible.* You can get a lump sum in closing or only part of
your money and draw on the rest when you need it. Unlike a home
equity loan or a refinance, you can get a home equity line of
credit in as little as ten days. An equity line is a good choice
if you'd like ready access to your equity.
A Great Lakes Mortgage Funding consultant can help you decide
which option is best for you. To schedule a no-obligation consultation
with a mortgage expert, call us at 877-27-RATES or visit our Lending
Team.
*Consult your tax advisor.
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