Refinancing is something that most people will do at some point in their home ownership years. The reasons are many; sometimes it’s to get a better rate, sometimes to combine a first and second mortgage. Still others will refinance to take money out from the equity on the home and pay bills or do renovations. Whatever the reason, equity plays a major role. What Is Equity? Simply put, equity is the difference between the value of your home and what you owe on it. Although the term is very common, the truth is that not every homeowner has equity, and in fact some may be in the opposite position. Equity increases over time when, as a general rule, the value of a home increases while at the same time the mortgage loans are being paid down. In difficult economic times, equity may build slowly or even be lost. What Does Equity Have To Do With Refinancing? While it is possible to refinance a home in which there is little to no equity, it is more difficult. You can refinance for a better rate, but you won’t be able to take any money out on the loan. When the house is […]
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You have probably heard a lot about home equity loans if you have spent any time at all looking at home financing options. These are loans that are usually taken out by people who already own a home and want to borrow against the value of the home. Not everyone can get a home equity loan-of course, you must actually have equity in the home, as well as the right credit situation. Home equity loans are a great way to finance major renovations on your house. What Is Equity? It’s a term that is heard a lot, but for those new to the housing market, it might not be one you exactly understand. It’s quite simple, really. The equity in your home is the difference between what you currently owe on it and the current market value of the home. You can achieve equity in your home in two main ways. The first is by paying down your mortgage. The second is by increasing the value of your home, either through renovations you have done or a general increase in the market. Loans Vs. Lines of Credit Along with home equity loans, you have probably heard about home equity lines […]
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