home equity

5 questions to ask before you tap into your home equity

How should I tap my equity?
How should I tap my equity? | Ryan McVay/Getty Images

How should I tap my equity?

There are three ways to take advantage of your home's equity:

  • A home equity line of credit -- HELOC, for short
  • A home equity loan
  • A cash-out mortgage refinance

HELOCs tend to have variable rates that are low initially but can rise over time. Home equity loans usually have fixed rates and five- to 15-year payback periods. Cash-out refis can have variable, fixed or hybrid rates (fixed, then variable) with terms of 15 or 30 years.

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Ask Dr. Don

HELOC vs. reverse mortgage?

Dear Senior Living Adviser, If you have a home equity line of credit , or HELOC, for $150,000 with no balance on it, should you use it instead of a reverse mortgage? Which is a better way to save the assets if there is... Read more


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