For as long as there has been homeownership, people have been borrowing against their home equity. Home equity, the difference between the amount your home could sell for and the amount you owe on your home, can be a ready source of cash. You can access that cash via a home equity loan, frequently styled as a second mortgage, or a refinancing, where you pay off your existing mortgage with a new mortgage that is for an amount larger than the amount needed to pay off your existing mortgage. The excess cash is yours to use as you see fit. Popular as those options are, they are not your only choices.
A Home Equity Line of Credit (HELOC) is a loan provided by a lender that allows you to borrow against the equity in your property (the difference between the amount owed on your home and the value of the home). This revolving line of credit is secured by a mortgage on your property and will have a maximum loan amount that can be withdrawn from over a set period of time (draw period). HELOC’s are often used to make large purchases, remodel your home, consolidate high interest credit cards or are opened as a go-to fund for emergencies.
If you are considering opening a HELOC or need an attorney to oversee your closing, please contact our office for more information.
As you consider how or whether to borrow against the equity in your home, you should talk to the real estate attorneys of Weeks & Irvine, LLC. We are familiar with home equity borrowing and HELOCs, and we can help you make the choices that will help you reach your goals.