Your home is the biggest purchase you will ever make.

And if you live in one home long enough, you will put a great deal of money in your home.

Some of that money you can get access to.

It’s called equity.

You accumulate equity by paying your mortgage.

The portion that doesn’t go to the bank as interest goes towards your ownership in your house.

After 5 years on a 30-year mortgage, you paid off 10% of your home loan.

On a $200,000 loan, that’s $20,000.

That’s a lot of money.

So how do you access that money?

Here are some ways to put that money in your pocket.


In this scenario, a new lender loans you money on the current value of your home and replaces your original lender.

To put money in your pocket, the term of your new loan will have to be the same length of time.

So if you had a 30-year mortgage, you will have to refinance with a 30-year mortgage.

This approach makes a lot of sense if current interest rates are lower than your interest rate.

If you lower your interest rate from 6% to 4%, you will save a bunch of money.

I would work with a mortgage broker to refinance your home.

They can find you the best rates.

Home Equity Loan

A home equity loan is a type of second mortgage.

The lender gives you a fixed amount from your home and you start paying this back day 1.

The length of term varies but 15 years is common.

Be aware though, the lender typically charges a higher interest rate than your mortgage.

This option works well for specific projects in your home.

If you have plans to renovate your kitchen, this may be the right fit for you.

Credit unions do a great job with these loans.

Delta Community Credit Union is really competitive with their home equity loans.

I don’t get any money for plugging them it’s just a suggestion to help you out.

I used them and they are great.

Home Equity Line of Credit (HELOC)

A home equity loan and a home equity line of credit are similar.

But the home equity line of credit has two phases.

You can borrow or repay as much money as you want during the first phase.

It’s called the draw phase and it acts like a credit card.

You only pay interest during the draw phase.

After the draw phase (typically 5 years), the amount you borrowed locks in and you have to start paying it back.

This is the second phase and it’s like the home equity loan discussed above.

You can’t draw any more money and have a time table to pay it back.

If you have several home projects to complete, the home equity line of credit is a great option.

Here again credit unions do a great job with these loans.

Delta Community Credit Union is really competitive with their home equity lines of credit.

I’ve personally used them for this one.


Accessing the equity in your home is a great ability to have.

The options listed above can work for you.

Fair warning: if you don’t pay any of these loans like you agreed, the lender will take your home.

So consider your options carefully before borrowing against your home.

Can you think of any other ways to access the money in your home?

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