As a homeowner, you may be wondering whether you should take advantage of the hot real estate market and make the most of your home’s appreciation by selling your home or tapping your equity. There’s no right or wrong answer, but there are a few factors to consider to make the right decision. Keep reading to learn the best ways to access your home equity.
Since July 2020, the median home sale price increased more than 20% year over year to $385,650. And with mortgage rates dropping, buyers are eager to take advantage of the hot market to lock in less expensive home loans.
Given the tight market, real estate is typically selling for more than the asking price, sometimes hundreds of thousands of dollars more. And lately, sellers who haven’t secured a new home are adding contingencies that protect them by remaining in the house until they purchase a new one. While bridge loans and other short-term financing options can help buyers expedite the process, they don't come without risks.
Consider tapping into your equity
Fortunately, you don’t have to sell your home to enjoy the benefits of rising home equity. Instead, you can get a home equity loan to fund an addition, give your kitchen or bathroom a facelift, or make a down payment on that beach house you’ve been dreaming about.
Here are four ways to tap your home's equity:
1. Cash-out Refinance
A cash-out refinance can be beneficial in a couple of ways, allowing you to fund renovations and improvements as well as potentially enabling you to lock in a lower interest rate on your mortgage. However, it's essential to keep in mind that if you go this route, you extend your repayment period, which could mean paying more interest over the life of your...
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