You probably already know that owning a home is a smart investment, but did you know you may be able to use the equity in your home to borrow money to use any way you want? You can use the money to pay for home improvements, add to a rainy day or investment fund, or you consolidate your existing debt like credit cards or student loans, at a lower interest rate.
As a homeowner, what options do you have to borrow money? Cash-out Refinance, Home Equity Loans, and Home Equity Line of Credit (HELOC) are all methods of financing using the equity in your home. The option you choose depends on your financial needs and your current goals.
Before making any decisions, let’s dive into what’s involved with each loan and the differences between them.
A cash-out refinance is a loan that allows you to access the equity in your home by refinancing with a new forward mortgage.
You can use the money for anything from paying off high-interest debt, to funding home renovations or covering large expenses like medical bills or college tuition.
When considering ways to access your home’s equity, each option has its benefits. A cash-out refinance offers a single, larger loan with potentially lower rates. A HELOC provides flexibility in borrowing smaller amounts as needed, and a home equity loan offers predictability with fixed payments.
Assess your goals and review your cash-out refinancing options with complementary debt review by calling a PHH loan officer at (855) 233-9749.