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  • Writer's picturePeter Seroter

The Most Common Ways To Access Your Home's Equity

Are you looking to tap into the equity in your home? Whether you're considering renovations, debt consolidation, or investing in other opportunities, leveraging your home's equity can be a smart financial move. In this guide, we'll explore various methods for accessing your home's equity and how they work.

1. Cash-Out Refinance:

With a cash-out refinance, you can refinance your existing mortgage for more than you owe and receive the difference in cash. This option allows you to access a lump sum of money while potentially securing a lower interest rate than other financing options. In cases where you currently have a very low rate on your mortgage, this may not be the best option.

How It Works: By refinancing your mortgage, you'll replace your current loan with a new one that has a higher principal balance. The difference between the new loan amount and your existing mortgage is paid out to you in cash at closing.

2. Home Equity Line of Credit (HELOC):

A HELOC is a revolving line of credit that allows you to borrow against the equity in your home. Similar to a credit card, you can borrow funds as needed up to a predetermined credit limit and only pay interest on the amount you use. If you are looking to borrow a large sum, a HELOC may not be your best choice as the interest rate is variable.

How It Works: After being approved for a HELOC, you can access funds by writing checks or using a debit card linked to the line of credit. As you repay the borrowed amount, your available credit replenishes, giving you ongoing access to funds.

3. Home Equity Loan (HELOAN):

A home equity loan, also known as a second mortgage, provides a lump sum of money upfront, which is repaid over a fixed term with a fixed interest rate. This option is ideal for borrowers who prefer predictable monthly payments. This is the best option for a large sum of money, but will also have a higher rate (although fixed) than a HELOC.

How It Works: Upon approval, you'll receive the loan amount in a lump sum. You'll then repay the loan over the agreed-upon term, typically ranging from five to 30 years, with a fixed monthly payment.


Some lenders offer hybrid products that combine features of both HELOCs and home equity loans. These options provide flexibility in accessing funds upfront while also offering the ability to draw additional funds as needed.

How It Works: With a hybrid HELOC/HELOAN, you'll have an lump sum at a fixed rate and term, once paid down, you can access funds additional as needed. This is great for taking out a large lump sum, but also have flexibility for the future.

5. Equity Share Programs:

Equity share programs allow homeowners to trade a portion of their home's future appreciation in exchange for a lump sum payment. This option provides immediate cash without taking on additional debt and no monthly payments are required.

How It Works: Through an equity share program, lenders trade a stake in your home's appreciation potential. In return, you receive a cash payment that can be used for various purposes. This program has a 10 year balloon term and has negative amortization.

Regardless of which option you choose, it's essential to weigh the pros and cons carefully and consult with a qualified mortgage professional to determine the best strategy for your financial goals. As a broker, I offer all of these programs so feel free to give us a call to discuss which may be best for you.

Contact us today at 844-786-1865 or email to discuss how we can help you make the most of your home's value.

Peter Seroter

NMLS 997692

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