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Homeowners spend a lot of time and energy scrounging up the money to buy their homes. It’s the biggest purchase people make in their life, so it needs to be done carefully. Even when you find a great deal on your dream home, navigating the financing can be stressful and anxiety-producing.
Then the years go by, and homeowners need to free up money for things like education, transportation, or further investments. Thankfully, your home isn’t merely a financial burden. The right financing can unlock its equity and help you down the road.
Let’s look at the different tools that homeowners have at their disposal.
Your Home Can Help Unlock Your Finances in Different Ways
1. Home Equity Loans
The home you bought years ago has likely increased in value of your home since then. People buy homes understanding that no other investment is as reliable and steady, but you may need to access this increase in value before you’re ready to sell the home.
Speak to industry professionals about how home equity loans from Burke Financial let homeowners access lump sum payments, so borrowers can access their home’s equity when they need it.
Your home will be appraised independently. Then, you can borrow against the difference between the appraised value relative to the existing mortgage.
The borrower receives a lump sum upfront, which they must make fixed payments against, with fixed interest rates, for the loan’s lifetime.
It can be used as collateral for installment loans, which can help you consolidate debt, improve your credit score, and get out of debt faster. Home equity can also be used to finance home renovations, which can increase the value of your home and make it more comfortable and enjoyable to live in.
2. Second Mortgages
Homeowners build more capital than they may realize each month by paying off their mortgage. If you have unexpected repairs, say, a roof moss removal, you may need a sudden surge of cash. The equity you built up already can be extremely useful, no matter your current credit rating.
A second mortgage also gets you a more competitive interest rate than you may expect. Secure a second mortgage through a broker can help pay for whatever requires funding, including freeing up capital to invest elsewhere or wiping out other high-interest debts. You’re the homeowner and can spend it however you see fit.
3. Home Equity Line of Credit (HELOC)
Homeowners can also use their mortgage as collateral to get favorable terms on a line of credit. Everybody has unique and specific financial goals and lifestyle needs.
If you’re considering either a home equity loan or a home equity line of credit because you don’t want to deal with a bank, speak to a professional with deep contacts among brokers near you. They’ll advocate for you and help you make the right decision based on all your needs.
Not every homeowner has the capital to treat their home purely like a retirement nest egg and sit idly by while it rises in value. Real life may throw a multitude of significant expenses your way, and accessing the funds your home represents may be the difference between making it all work. If you have any questions about how you can leverage your mortgage to help pay today’s bills, speak to a professional mortgage broker today.