When you’re looking at cashing out of your house, you’re going to have a couple of different options. The two primary options are a cash out refinance and a home equity line of credit, also known as a HELOC. A HELOC is very simple. They’re not going to touch your mortgage. So if you’re sitting on a 2% or 3% or 4% rate, you don’t want to touch that rate.

When rates are in the 6’s and 7’s and almost 8’s. So what are you going to do? You’re going to get a second loan. The second loan is going to be called a line of credit home equity line of credit. That’s going to give you access to usually up to 80% or 90% of the equity in your home.


There are qualifications that you’re going to have to meet in order to be able to qualify. Similar to when you’re purchasing it at home, the HELOC is going to work like this. Let’s just say your loan amount is $300,000. Your house is valued at $700,000 and you want to pop out $100,000. You can give us a call. We’ll set you up on a line of credit for $100,000.

The benefit of it is when we close on the loan and you realize that you only need $50,000 you can take $50,000 out and leave $50,000 in almost like a credit card. You have a $25,000 balance on your Amex. You don’t have to use it all. You can use $2,000 and then pay it back. The HELOC’s going to work like a credit card against your house.

You draw $50,000. You leave $50,000 in it, and you only pay on the initial $50,000 draw. Or you can pull it all out. For our product. It has a ten year interest only payment. So for the first ten years, you’re not making full payments on the $100,000. You’re only making payments on the interest of the money that you’ve removed from the line of credit.

So again, if you pull $50,000, you’re only making payments on the interest of $50,000. It’s that simple, guys. So to make it very easy for you and so you can remember a HELOC is just like a credit card, but the collateral is your home.

For more information contact us.