For most families, the equity in your home is one of your biggest assets. If you need to access cash, tapping the equity in your home is an option.
What is Home Equity?
Home Equity is the difference between your home’s market value and what you still owe on it. For example, a home that’s worth $200,000 and has a $150,000 mortgage balance has $50,000 in equity.
How Much Can I Borrow Against My Equity?
In Texas, you may borrow up to 80% of the value of your home. So using the example above, you could expect to borrow up to $10,000. Available equity which you could tap in this example was calculated as follows. Value of your home $200,000 x 80% = $160,000 less existing loan of $150,000 = $10,000 additional equity than can be tapped.
How Do I Borrow Against My Home Equity?
You can use a Home Equity Loans to access the equity in your primary residence homestead. It is sometimes referred to as second mortgages, because it is secured against the value of the property, just like a traditional mortgage. A Home Equity loan can also be placed as a first mortgage against your home if you have no other mortgage owing or if you desire to refinance another mortgage owing for a lower rate or term.
As with any loan, you should consider the pros and cons of taking on debt, as well as the costs (rate and fees associated with the loan) and the affordability of the payment. A home equity loan is a good alternative compared to other types of loans because:
Home Equity Loan Rates
as low as 3.20%APR¹