Home Equity: How to Use It

Home Equity: How to Use It

A refinance pays off your current mortgage and gives you cash based on your equity. These are good for:

l Lowering or locking in your mortgage interest rate

l Getting large sums of money ($30,000 or more)

Home equity loans (second mortgage) are installment loans that are paid out in one lump sum. They’re good for:

l repaying credit card debt

l remodeling projects

l buying a new vehicle

A home equity line of credit works like a credit card – you agree to a pre-set limit and then borrow as you need to, or in the event of an emergency, usually for up to 10 years. Good for:

l debt consolidation

l major home improvements