Ways to Convert Home Equity to Cash
/Dan Hubrich of Mountain View Mortgage is back and this month he’s explaining ways to convert the equity in your home to cash.
This month let’s talk about how to convert the equity in your home to cash! Short of selling your home, there’s basically 2 ways to do it. The first option is a cash out refinance. On a conventional or FHA loan you can go up to a loan amount of 80% of the appraised value. Any underlying existing mortgages would be paid off and whatever the difference is, is available for you to use however you’d like! This is a great option if you want to roll everything into one new loan at a good rate. Option 2 is to do a home equity line of credit or “heloc”. A heloc is a 2nd mortgage in addition to the existing mortgage you already have. The pros with a heloc are that they don’t cost anything to setup and they are very flexible. It’s basically like a giant credit card but it looks better on your credit and it’s tied to your house. The downside with a heloc is that the rate is a little higher since it’s a 2nd mortgage and they are usually variable rates. Right now rates are low but if they climb in the future, your payments could increase. Contact me with any questions or for more information and I’d love to discuss any options with you.