Cash Out

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If you already have substantial equity in your home, you can access it through a “cash-out refinance” mortgage.

What is home equity? Home equity is the difference between your home’s fair market value and the total balance of any liens or mortgages on your home. Think of it as your ownership interest in your home.

Home equity accumulates in four ways:

1. Money committed in the original down-payment

2. Appreciation in the local housing market over time

3. Physical improvements or renovations to the home

4. Principal payments on the mortgage itself

Through these four avenues, cash value—or equity—steadily builds up in the property.

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Putting your equity to work for you

The good news is that the cash in your home doesn’t have to stay “buried.” If you’ve been thinking about paying off credit card debt, saving money for your children’s college, making home improvements, or adding to your retirement fund, you can put your equity to work for you.

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In addition, if an unforeseen expense arises—or your employment situation changes—your home’s equity can help.

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