Home Equity is the amount of cash you have built up in your home if you sold your home and paid off your mortgage. The equity in your home increases either when your property value goes up, or you pay down your mortgage or a combination of both.
Home equity will decrease in those rare times when home prices decrease or you refinance your mortgage and pull equity from your home or a combination of both.
Can I access my home equity?
Assuming that you have more than 20% equity in your home, and you qualify for a mortgage through our A or B we could place you in a discounted fixed rate mortgage or a variable rate mortgage. You can compare our mortgage rates here.
If you have credit issues or income challenges and cannot refinance your mortgage through our traditional lenders we could suggest refinance your mortgage through one of our alternative mortgage lenders or private lenders. They offer first and second mortgage, based on the equity in your home.As long as there is more than 20% equity in your home you are generally approved.
You could get up to 95% loan on a second mortgage to access the equity out of your home.
Popular Equity take out refinance options.
The popularity of the different refinance options will depend on credit, income and debt ratios.
25 year Amortization
For borrowers who want to pay off their mortgage faster and make larger monthly payments.
30 Year Amortization: For borrowers who want to reduce their mortgage payments. A longer amortization will increase the overall amount of interest you pay on your mortgage.
Variable Rate Mortgage
Historically variable rate mortgage rates are lower than fixed rate mortgage rates. Borrowers using a VRM tend to pay off their mortgage faster. VRM’s are tied to the mortgage lender short term lending rate and could fluctuate up or down when that rate change, thus the rate isn't predictable.
Fixed Rate Mortgage
With a fixed rate mortgage borrowers know what their monthly payment will be for the term of the mortgage and can thus budget for each payment. Fixed rate mortgage term varies from 6 months to 10 years with the most popular being the 5 year fixed rate mortgage.
Refinancing your mortgage before the mortgage maturity date could mean you will have to prepay your mortgage and pay penalties. Getting a Home Equity Loan is a second mortgage on your property with higher rates but could be more advantageous than refinancing.
A home equity loan allows you to borrow up to a certain percentage of the value of your home. They are easier to qualify for as you are using the equity in your home as collateral.
If you compare your house to your savings account, each time you take equity out you reduce the balance of your equity or your available cash. The more equity you take out of your house, the less ownership interest you have.