If you are thinking about a major expense or looking to consolidate your bills, a home equity loan service can help you out. The equity is the percentage of the home you own. You can take this money out or consolidate credit card debt with it.
For example, if you purchase a home worth $300k and put $50k as a down payment while the bak pays the rest, you own 17% of the home. As you continue to make payments, you will own more and more of the home.
An easy way to figure out your home equity is to take the current value of your home and subtract it by the remaining mortgage. A home equity loan is money borrowed against that equity you have.
It’s a safer loan for banks to make, meaning that the interest rates on repaying it are lower with higher borrowing amounts. The interest you pay may also be tax-deductible.
You can get a home equity credit line that essentially acts as a credit card. Essentially you’re taking money out of your equity over time. You will have varying monthly payments based on the amount you take out and the interest rate at the time.
For more information, click on the link to the video above.