“Next year we should….”
This is the conversation starter that always seems to come up at this time of year. Whether it’s renovating your home to host the growing number of holiday guests that arrive or formulating a plan for a vacation to get away from those same holiday guests, the trick to turning “Next year we should” into “This year we are” may depend on your access to funds.
Many people do not realize that their home may be a hidden source of wealth for them. Here are three ways you may be able to use your home to fund your dreams in 2019.
Cash Out Refinance
One of the benefits of a hot housing market is that home values are on the rise. There is a good chance your home may have gone up in value, providing you with additional equity. A cash-out refinance allows you to turn that equity into cash. Through a cash-out refinance, you can refinance your current loan with a higher principle. The difference between the old loan and the new loan equals the “cash-out” portion you receive at closing. Things to consider when refinancing is that you do have to use current market interest rates and there are closing costs involved. You can opt to roll closings costs into your new loan amount. For tips on whether a cash-out refinance is right for you, click here.
Home Equity Line of Credit
Another way to tap into the equity in your home is to open a Home Equity Line of Credit (HELOC). A HELOC is a revolving line of credit, similar to a credit card where you take out an advance up to the full credit limit. As you pay off the credit advanced to you, you can use the credit line again and again throughout the term of your agreement to continue checking off all the projects on your list. Like a refinance, HELOCs may have additional fees and closing costs associated with them, but you can finance those costs. Some financial institutions, like Ameris Bank, pay some closing costs and do not require an origination fee. A HELOC is a good option to consider when your current mortgage has a low interest rate that you would like to maintain. For more information on an Ameris HELOC click here.
If your plans for 2019 include retirement, then you may be eligible for a reverse mortgage. A reverse mortgage allows you to convert the equity in your home to access cash from your home as long as you live in your home. With a reverse mortgage you still own your home and are responsible for the maintenance of your property and payment of property taxes and insurance annually. The loan is paid back when the owner sells the home, moves out or passes away. The owner, spouse or estate would repay the loan Neither you nor your heirs are responsible to repay any portion of the loan that exceeds the fair market value of your home. For details on whether a reverse mortgage is right for you contact your Ameris Bank mortgage banker.
Each of the above options is subject to credit approval and eligibility requirements. Please check with an Ameris Bank mortgage banker to find the mortgage solution that is right for you.
By: Marlene Sheard
Marlene is the mortgage marketing representative for Ameris Bank and previous Sales and Marketing President for her local Home Builders Association who enjoys sharing her experiences in the buying, selling, and financing of homes.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.