How do you get the equity out of your home?
Posted by @TopMortgageRate
How much equity can you cash out of your home?
Home equity loans are back. The opportunity to get a cash-out refinance, home equity loan or home equity line of credit is once again alive and well.
But how much equity can -- or should -- you extract from your home?
Banks limit how much equity you can takeHome equity options aren't as aggressive or generous as those of yesteryear. But they're not pocket change either, especially for longtime homeowners who have experienced rapid value appreciation in the past 2 years.
Years ago, homeowners could borrow up to 100% of their equity, says Jay Voorhees, broker and owner of JVM Lending, a mortgage company in Walnut Creek, California. Today, most lenders put significantly lower limits -- like 80 to 90% -- on home equity borrowing.
Let self-discipline govern HELOC amountVoorhees says borrowers should "go to the limit" with a home equity line of credit, or HELOC, because they don't have to tap the full amount of the credit line that's available.
How much can they borrow?Pat and Morgan bought a house in September 2009 for $172,000. They made a 20% down payment and refinanced 3 years later. In July 2014, they applied for a home equity line of credit.
Read entire article on Bankrate.com