What can you do with a hundred grand?<\/p>\n
Would that mean a dream vacation… Paying off that credit card debt… Giving that drab kitchen a long, overdue lift?<\/p>\n
Good news is: you might be sitting on a home equity “cash cow” and not even realize it.<\/p>\n
The sad part is most homeowners don’t realize the leverage they have. In fact, there’s $5.4 Trillion in unclaimed home equity according to the latest Mortgage Monitor Report.<\/p>\n
In the next few paragraphs you’re going to learn 3 ways to tap into your home equity cash cow. Let’s take a look at the pros and cons of each…<\/p>\n
Cash-out refinance might be a great option if you need a large chunk of cash – fast.<\/p>\n
The way it works is you’d basically be getting a new mortgage – along with cash. How much cash? Usually up to 80% of your home value. For example, let’s say your house is worth $100,000. You may receive up to $80,000 cash. Of course, the better your credit score, the more cash you could qualify for.<\/p>\n
Cash-out refinancing has always been a popular choice with homeowners. The most common reasons are:<\/strong><\/p>\n Pros<\/strong><\/p>\n Cons<\/strong><\/p>\n The Home Equity Line of Credit (HELOC) is perfect if you need some extra spending money<\/strong>.<\/p>\n A HELOC is like a credit card. You can tap into it whenever you choose. You’re charged only when you use it. It comes in handy because you don’t need to draw a lump sum of money all at once.<\/p>\n Pros<\/strong><\/p>\n Cons<\/strong><\/p>\n With HELOC you’re not replacing your current mortgage like with the cash-out refinance. However, the cash-out refinance is a better option if you’re looking to lower your interest rate. It all really depends on your situation.<\/p>\n A home equity loan is a kind of hybrid between cash-out refinance and HELOC.<\/p>\n The way HEL works is you borrow a lump sum of money (like cash-out refinance) without replacing your current mortgage (like HELOC).<\/p>\n This is a great option if you’re happy with your current mortgage and interest rate. You want to keep your current mortgage and<\/em> you need a large sum of money now.<\/p>\n\n
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2. Get a line of credit for your equity<\/h4>\n
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3. Get cash for your equity (Option #2)<\/h4>\n