Your home equity is one of your biggest assets. Learn how to tap into it through home equity loans and HELOCs.
What is Home Equity?
Home equity is your home's value minus what you owe. If your home is worth $400,000 and you owe $250,000, you have $150,000 in equity.
Home Equity Loan vs HELOC
Home Equity Loan: Lump sum, fixed rate, fixed payment. Best for large, one-time expenses.
HELOC (Home Equity Line of Credit): Revolving credit, variable rate, draw as needed. Best for ongoing expenses.
Common Uses
- Home improvements
- Debt consolidation
- Education expenses
- Emergency fund
- Major purchases
Risks and Considerations
Your home is collateral. If you can't repay, you could lose your home. Only borrow what you can afford to repay.