How much your equity has grown since you bought your home.
The highest sales price in your area.
The lowest sales price in your area.
Refinance to tap home equity.
You can consolidate debt, make home improvements, or budget for big life events like a wedding or college education with a refinance loan. The three most common types of loans for tapping home equity are cash-out refinances, home equity loans (HELs) and home equity lines of credit (HELOCs).
A cash-out refinance is when you take out a loan for more than you currently owe, and pocket the difference in cash. You generally need at least 20% equity in your home to be eligible for a cash-out refi, and you can cash out up to 80% of your home’s value. Eligible military borrowers may cash-out up to 90% of their home’s value with a loan insured by the U.S.Department of Veterans Affairs.
Home equity loan (HEL):
A home equity loan allows you to borrow home equity in one lump sum with a fixed-rate payment for a fixed term usually between five and 15 years.
Home equity line of credit (HELOC):
A HELOC works like a credit card with a specific dollar amount, or credit line, you can borrow against. The interest rate is variable, but you can charge as much of the line as you need, when you need it, during the initial “draw period.” During this time, you make interest-only payments only on the amount borrowed (not the credit line amount). You can also make additional payments toward your principal amount. After the draw period ends, you’ll enter the repayment period in which you must pay down the principal amount and any outstanding interest.
Consider selling your home.
Contact a real estate agent to discuss if now is a good time to sell your home and pocket the equity you’ve built. You can also use it to buy your next home.
Get rid of private mortgage insurance (PMI).
You’re probably paying PMI if your down payment was less than 20% when you bought your home. If your home value is high enough, you might be able to cancel your PMI.
Real estate agents have access to the most current market price data for homes and can produce a free report called a comparative market analysis (CMA). A CMA is like a home value map of homes similar to yours, and estimate your home’s value based on similar homes that have recently sold in your area.