equity
HELOC / HELOAN
Like a favorite record you play on repeat, a HELOC gives you the flexibility to access funds multiple times, whenever you need it. It’s your personal revolving credit line, ready to tap into your home’s equity for ongoing financial needs.
A HELOC acts as a revolving line of credit, allowing you to borrow as needed and offering flexibility similar to a credit card. It typically comes with a variable interest rate. Fun fact: when you hear about Fed rate cuts or hikes in the news- it's related to the prime rate. A variable rate consists of the prime rate + a fixed margin set by the lender; meaning the rate can go up and down over time. Repayment terms are flexible, allowing you to pick the amount of draw period (when you can withdraw money), which is followed by a repayment period. This makes a HELOC ideal for managing ongoing expenses, home projects, or other needs that require multiple withdrawals. On the other hand, a HELOAN provides a lump sum of money upfront with a fixed interest rate, resulting in predictable, fixed monthly payments over a set term. It's best suited for one-time expenses, such as major purchases or debt consolidation, where the total amount needed is known. Both options allow you to tap into your home's equity, WITHOUT affecting your current rate on your first mortgage. |
CASH OUT REFINANCE
Unlock the potential of your home's value with a cash-out refinance. Whether you're planning renovations or consolidating debt, it's a savvy way to turn home equity into accessible cash, served up on a silver platter.
A cash-out refinance replaces your existing mortgage with a new, larger loan, allowing you to access the difference in cash. The amount you can borrow is based on your home's equity. There are no restrictions on how you can use the cash. Common uses include home improvements, debt consolidation, investing, divorce buy out, education expenses, large purchases, etc. The process usually takes about 15 days. Monthly payments have the potential to increase or decrease. While you will be borrowing more money, you have the option to elect a longer term, you may have the ability to remove mortgage insurance, change the rate, etc. Closing cost can typically be financed, contingent on the available equity. If an appraisal is required, that expense would need to be paid out of pocket. You usually need to wait at least six months after purchasing your home before you can do a refinance. You'll need to qualify similar to a traditional purchase mortgage. |