Home Equity: Tips on How to Use it
A refinance pays off your current mortgage and gives you cash based on your equity. These are good for:
| Lowering or locking in your mortgage interest rate
| 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:
| if you need to repay credit card debt
| renovation projects
| 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:
| debt consolidation
| major home improvements