Using Your Home's Equity
What Equity Is
Home equity is how much of your home you truly own. It can increase over time if the property value rises, and as you pay down the mortgage loan balance. Essentially, as a homeowner, you “own” more of the home as you pay down the mortgage.
What Your Equity Can Do
The more equity you have in your home, the more financing options you'll likely have for funding home projects, consolidating debt, or paying for other big expenses.
HELOCs vs. Home Equity Loans
A HELOC offers more flexibility than a lump-sum Home Equity Loan does. That's because with a HELOC, there's a maximum amount you can borrow. But you don’t have to take it all – or take it all at once. And you only pay interest on the amount you actually borrow.
There are some other differences between the 2 home equity options, including variable vs. fixed interest rates. But in a nutshell, it's about flexibility.
HELOCs for Home Projects
Most people who get a HELOC do it to fund home projects. It's such a good fit for those, because home projects can be so unpredictable. The final cost can change, and the work can end up taking longer than expected.
Also, HELOCs let you pace yourself. You can keep an Affinity Plus HELOC open for up to 10 years. So you could potentially complete several projects over time, instead of trying to do it all in one shot.