how to borrow against home equity
the interest rate on home equity based borrowing is typically lower than that on credit cards and personal loans because the funds are secured by the equity so the equity in your home can be a source of funds the interest on borrowing with your home equity is generally tax deductible if funds are used to improve the home 3unlike some investments home equity cannot be quickly converted into cash that s because the equity calculation is based on a current market value appraisal of your property that appraisal is no guarantee that the property would sell at that price however you can leverage your home equity as collateral in a variety of ways to secure low cost funds for your financial needs including with home equity loans home equity lines of credit and cash out refinance a home equity loan sometimes referred to as a second mortgage usually allows you to borrow a lump sum against your current home equity for a fixed rate over a fixed period many home equity loans are used to finance large expenditures such as home repairs or college tuition 4a home equity line of credit heloc is a revolving line of credit usually with an adjustable interest rate which allows you to borrow up to a certain amount over a period of time helocs work like credit cards where you can continuously borrow up to an approved limit while paying off the balance 5