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 a very good source of down payment for your next investment property. Though interest rates have been on the rise it is definitely a viable option for many Idaho residence who have seen their property values increase drastically. Though not a solution for all, this IS a good strategy for some. Many Ada & Canyon county residents find themselves with a unique opportunity to optimize home appreciation and grow their own wealth through Real Estate ownership. I encourage anyone to talk with a real estate professional, lender and a property manager to dive into the viability of this type of investment. Working with a real estate professional and team that can provide accurate numbers, you can make a sound decision that may increase your net worth and monthly income!