Learn about the process

Quick look

If you’ve paid off a substantial portion of your home, you’ve likely built equity up from it. 

Both home equity loans and lines of credit (HELOCs) put that equity to use by allowing you to re-invest the difference between your home’s value and your remaining debt, known as your home equity, toward whatever you choose.

Getting started

Keep in mind, this isn’t free money. 

Your home equity loan adds to the remaining mortgage debt, and home equity loan rates will also cost you interest. 

However, the loan can be used in many useful ways:

  • Enable you to waive insurance fees on your existing home loan
  • Make a down payment on a second home or investment property
  • Secure a lower interest rate and reduce the overall interest you’ll need to pay 

Done correctly, home equity loans can save you thousands of dollars as well as open up new avenues of opportunity.

Things to consider

Unlike a first time home buyer loan, a home equity loan is what’s known as a secured loan, where your house’s value serves as your collateral. 

Conversely, unsecured loans have no such backing and rely solely on the borrower’s financial responsibility to pay back the money. 

A home equity loan is seen as less risky for the lender, allowing them to offer notably lower interest rates.

Even though a secured loan is more cost-effective for you as the borrower, failure to pay the loan in time can be far more consequential and can lead to the loss of your house. 

But when properly managed, you can invest that money in a wide variety of profitable ventures.

  1. Starting a small business
  2. Paying for college
  3. Buying a new property
  4. Consolidating your debts

A home equity loan gives you the freedom to do all of this and much, much more.

Next Steps

If you’ve decided to invest a portion of your home equity, you need to be aware of the debts that come with it. 

Be certain you have the funds to handle a home equity loan before taking it out, and avoid the temptation to use it as a license to spend frivolously. 

Our team at Rosa Briggs Home Lending will help you set clear and achievable goals for those funds and ensure that you stick to them. By partnering with our expert advisors, you will set yourself up for success.

Let’s connect

Our expert team of mortgage loan experts is fully equipped to walk you through every step of the mortgage process. From the moment you contact us until your first step into your new home and beyond, we’re prepared to go the distance with you. 

Fill out the form or give us a call at 425.268.0245 to get started today!

Frequently Asked Questions

When should I begin the home financing process?
While you won’t have to begin financing until you’ve finalized your decision on a home and begun making payments, it’s important to begin preparing for that moment as early as possible. Make sure to invest regularly in your savings account, spend within your means, and choose a home that fits your budget.
What factors influence my borrowing capacity?
Your borrowing capacity will typically be determined when you get pre-approved for a loan. During that process, your mortgage lender will verify your current income, credit score, assets, and revolving and installment debts like credit cards and student loans. By using those to calculate your debt-to-income ratio (DTI), they can approve you for a corresponding home loan.
What does the closing process look like?
Once everything has been set in stone, you will have a three-day review period to look over the final documentation. You will also have the opportunity to do a final walk-through of the house to ensure things are in order. After that review period, you will sit down with your lender and sign the final documentation. Congratulations on your new home!
What’s your rate?
Here at Rosa Briggs, we offer both fixed-rate and adjustable-rate mortgage loans. Fixed rates will provide you with consistent monthly payments for the duration of the loan, while ARMs will move up and down with the current market after an initial lower payment period. Contact us today to learn more about which option is right for you.

Find the right refinancing strategy with Rosa Briggs Home Lending.

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