How can I use home equity for life goals & milestones?​

Equity you have built in your home can be used to fund a number of goals and milestones you may have. There are two major ways to tap into your home’s equity: a home equity loan and a HELOC. 

A home equity loan provides you a lump-sum based on the amount of equity you’ve built up in your home. This is a second mortgage, so you will have to pay back your home equity loan along with any remaining mortgage payments you have. 

A traditional home equity line of credit, or HELOC, will open a line of credit you can draw on as needed. Your line of credit will be based on the equity you have built up in your home. HELOCs will have two periods: a draw period and a repayment period. During the draw period, you can take money as needed while only paying interest. During your repayment period, you will have to make payments on both the total loan amount and interest. 

Getting a HELOC with Rate will be slightly different. Our HELOCs will give you a lump-sum based on your home’s equity, and as you pay back your borrowed amount, you will have the option to make additional draws on your approved amount. 

To start accessing your home’s equity, reach out to a lender and begin the application process today! 

Homeowners choose to tap into their home’s equity to fund any necessary or desired expenses. If you have gained equity in your home, it could be a valuable resource that you could access through a home equity loan or HELOC. You can gain home equity through a larger down payment, paying off your mortgage, improvements or market growth. 

Home equity loans and HELOCs can both be used for a number of borrower needs. Here are some of the more popular ways borrowers choose to use their home equity. 

Renovations are one of the most common reasons that homeowners choose to tap into their home’s equity. Using your home equity to fund your renovations can improve livability, functionality and resale value of your home.  

If you have been hoping to remodel or fix up any rooms in your home, you can use your home equity to make the spaces feel more like you. But not all renovations are planned, like appliances that stop working or a pipe that bursts, so tapping into your equity is a great way to fix these unforeseen problems without draining your savings. 

Some renovations could increase your home’s overall value and therefore your home equity, making this home equity use a great return on investment. Using your home’s equity for renovations could be tax deductible,* so talk to an expert to see if any of your planned renovations could qualify for deductions or rebates. 

Some homeowners with high-interest debts, such as auto loans, credit cards or even school loans, could choose to consolidate them with their home equity. With the funds from your home’s equity, you can consolidate other debts and only have to pay back your home equity loan or HELOC. 

The interest rates through a loan that taps into your home equity could be lower than other debts, meaning you may end up paying less in interest when consolidating. 

If there is a larger purchase you’ve wanted to make but have a hard time saving up for, your home’s equity could help. With the funds from your home equity, you could pay for a gorgeous wedding, beautiful vacation, continued education or make a down payment on a second property.  

Going back to school and earning a degree can be costly, so your home equity might ease that burden while investing in your future and education.  

Buying a second home, as either a vacation or investment property, is a smart investment for your home’s equity, as the property can appreciate in value. 

Unfortunately, life can throw unforeseen costs at you.  

It is not always easy to plan for unexpected home repairs, car breakdowns or medical bills. If any of these were to occur, you could be looking at larger payments that might seem unmanageable.  

Similar to using a home equity loan or HELOC for consolidating debt, the funds from your home’s equity can help pay off any of these expenses. 

You can start accessing your home’s equity today by filling out an online application with a trusted lender. To tap into your home's equity through a HELOC or home equity loan, you will have to meet any loan requirements set by lenders.  

Each lender will have its own qualifications for credit score and debt-to-income (DTI) ratio. The higher the credit score and lower your DTI ratio is the better terms you could qualify for.  

It is standard for lenders to verify that you have at least 20% home equity before approving your loan. 

To talk with a lender and begin tapping into your home’s equity, start your application today! 

_{*Rate does not provide tax advice. The consumer should always consult a tax advisor for information regarding the deductibility of interest and other charges in their particular situation.} 

_{Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Refinancing your mortgage may increase costs over the term of your loan. Restrictions may apply.} 

_{Information provided is for educational purposes only. It should not be construed as financial or legal advice or instruction. Rate does not guarantee or assume liability for the accuracy, completeness or timelines of the information. You should conduct additional research before making any mortgage related decisions.}