Women in Real Estate Funding
Your home equity, explained plainly
Equity is the part of your home you actually own. There are several ordinary ways to use it, they cost different things, and the right one depends on facts about you that no website knows. Here is what each one is, so the conversation starts from something true.
The ordinary ways of using it
- Cash-out refinance
You replace your existing mortgage with a larger one and take the difference in cash.
You are re-starting a mortgage. The rate and term will be whatever is available when you do it, which may be better or worse than what you have now.
- Home equity loan
A second loan alongside your existing mortgage, for a fixed amount, repaid over a fixed term.
Two payments instead of one. Your existing mortgage is untouched, which matters if its rate is one you would not get again.
- Home equity line of credit
A credit line secured on your home that you draw from as you need it.
You pay on what you draw. The rate usually moves, so the payment can rise.
- Reverse mortgage
For older homeowners: borrowing against the home with no monthly repayment, settled when you leave it.
It requires the home to remain your principal residence. Moving out — including moving abroad — makes the loan due. This one needs a long conversation, not a web page.
What we will and will not tell you
We will work the numbers through with you — what each option would cost, what it needs from you, and where it does not fit. We will say plainly when the answer is that none of them is right.
We will not tell you a rate before anybody has looked at your credit, and we will not recommend a product to you on a web page. Those decisions sit with a licensed Mortgage Loan Originator who has read your file.
Questions people actually ask
- What is home equity?
What your home is worth today, less what you still owe on it. If it would sell for $400,000 and the mortgage balance is $250,000, your equity is $150,000. It goes up as you pay the mortgage down and as the property appreciates, and it goes down when values fall.
- Is using it risky?
It is debt secured on your home, so yes — that is the honest answer. Used to clear higher-interest debt it can cost you less overall. Used to cover a shortfall that keeps recurring, it moves the problem onto the house. The difference is worth talking through with somebody before you commit.
- Will it improve my credit score?
It might, and it might not. Consolidating card balances into one secured payment can help if every payment is made on time. It also adds a large secured debt. Anyone who tells you it definitely helps is guessing about your file.
- How much can I take out?
Lenders each set their own limits, and the answer depends on your income, your credit and the property. Nobody can tell you a figure — including us — until somebody has actually looked.
Ask us to call you
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Or look around first
Or text (954) 866-2171 and talk to Money Penny.
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