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The Hood Magazine

Tapping In to Your Home's Equity

Sep 20, 2022 ● By The Hood Magazine

By: DVN Mortgage 

Did you know homeowners have gained $1.7 trillion in tappable equity since late 2019? Part of that comes from the market simply doing its thing. In Sioux Falls, a home’s value has increased on average by 15% year-after-year! That’s extraordinary when the national average is 3-5%. But the other piece of that equity has come from the home improvement boom brought on by the pandemic. I think the isolation time during COVID made us more aware of how we could use our homes more fully.

Did you know your home equity is like a savings account? A tool you can use to invest in your future and build your wealth. Many customers started on some improvements themselves and later reached the point where they could not move forward without additional funding.

Home equity is the difference between the value of your home and how much you owe on your mortgage.

Making key upgrades to your home can boost your home’s value, and your equity in turn. So, let’s get to it. Here are a few great ways to tap into your home’s equity and some examples of what those funds can be used for.

1. A home equity loan

This is often called a “second mortgage” and this type of loan allows you to borrow a set amount of money you can then use for many things.

2. A home equity line of credit

Also called a HELOC. This type of loan allows you access to a line of credit which you can use as much of as you wish, whenever and however you choose over a fixed period of time.

3. A cash out home refinance

This involves updating your current mortgage by adjusting the interest rate and/or terms of the loan while also taking out a large sum of cash equal to a portion of the equity you’ve built into your home.

With all three of these options, you can use the funds for pretty much ANYTHING! Fund home renovations or pay off expensive debt like those high credit card balances with high interest rates. Pay for college for yourself or a child, or fund that family vacation you have been planning for years. Use the money on a wedding, to start that business you have always dreamed of, or simply set it aside in case of emergencies.

There are so many ways you can use your home’s equity to pursue the next chapter of your family’s story. Thank you for letting me share a few with you today.

If you’re interested in having a conversation about one of the options above, I’d be happy to discuss your options and provide additional advice about how you can make your equity work for you.

Dawn Van Nieuwenhuyzen – Senior Mortgage Banker – NMLS #21096 – Plains Commerce Bank

Dawn – 605.271.9754

Member FDIC. Equal Housing Lender. Loans are subject to credit approval.