Home Equity: How to Use It A refinance pays off your current mortgage and gives you cash based on your equity. These are good for: l Lowering or locking in your mortgage interest rate l Getting large sums of money ($30,000 or more) Home equity loans (second mortgage) are installment loans that are paid out in one lump sum. They’re good for: l repaying credit card debt l remodeling projects l buying a new vehicle A home equity line of credit works like a credit card – you agree to a pre-set limit and then borrow as you need to, or in the event of an emergency, usually for up to 10 years. Good for: l debt consolidation l major home improvements Leveraging equity in an existing home can be …