Life is unpredictable. You might come across a large expense, medical bills, or a necessary home improvement project that you have been putting off. Your home equity can grant you access to some cash or a loan when needed. Your home equity is your home’s current value minus what you owe on the home. If your home’s current value is $250,000 and you owe $150,000, you have $100,000 equity in your home. Here are two ways Lakeview can help you to tap into your home equity or convert it into cash:
- Cash out refinance
- Home Equity Loan (HELoan)
What is a Cash Out Refinance?
A cash out refinance allows you to tap into your home equity for cash and refinance your home simultaneously.
A cash out refinance replaces your current mortgage with a new one. With this financing option, you borrow more than your current loan and receive the difference in a lump sum.
The lump sum of cash can be used to pay off other debt, like student loan debt, complete home renovations or pay unexpected bills. There maybe be additional benefits to a cash out loan such as lower monthly payment or a shorter loan term. A cash out refinance typically has a lower interest rate than other types of financing, such as a home equity loan.
If you want to learn more about cash out refinance, click here.
What is a Home Equity Loan (HELoan)?
A home equity loan also leverages equity in your home for cash, but it’s a second mortgage and lien on your primary residence that you pay off monthly. The loan has a low fixed rate, fixed payment and loan term. The loan amount you get approved for depends on your home equity, among other factors.
After the loan closes, you will receive your equity as a lump sum payment. You can use these funds however you’d like.
Which Option is Right For You?
Our mortgage loan experts are here to help you explore your options and weigh in on the pros and cons. They’ll get to know your financial situation and your goals and look for ways that Lakeview can help you achieve them.
What you should know:
- Replaces your first mortgage
- May be eligible for additional cash
- Closing costs are required
- Usually lower interest rate than HELoan
What you should know:
- Does not replace your first mortgage
- Fixed rate monthly payment and loan term
- No closing costs
- Typically a lower interest rate than a personal loan
Call us to get started today.
Disclaimer: Refinancing to reduce total monthly payments may lengthen repayment term and increase total interest expense. Mortgage rates subject to market change without notice. Other terms and conditions may apply.