3 Ways Homeowners Can Benefit from their Home Equity Now

Advertising Disclosure

This article was made possible through advertising relationships with one or more of the advertisers listed on this page whose products and services we think our readers will find valuable. This article was written by our Ads team and doesn't necessarily reflect the views of Money's editorial team. Learn more about how we make money.

Getty Images/iStockphoto

With home prices at record highs, your property may be worth a lot more than you think.

Your home is a fixed asset. Accessing its value or equity is a relatively simple process. Below, we've dug into the best ways to tap into the equity of your home without selling.

Here are 3 smart moves to make in 2022 by leveraging the equity of your home:

Home Equity Line of Credit

A home equity line of credit (HELOC) is a secured loan that enables you to borrow money using the equity you've accrued in your house. Essentially, a HELOC allows you to use your home as collateral.

If you’re looking to renovate your home, tapping your home equity may be a good way to get the funding you need. Is your child going to college soon? A home equity loan for college tuition can result in a better interest rate than other types of loans, particularly if you have excellent credit.

If a HELOC sounds like a good choice, you can leverage your home equity with Figure. To check what rates you may qualify for, simply click here and enter your information.

Cash-Out Refinance

If you have at least 20% equity in your home, you could get a cash-out refinance and use the profits as you see fit.

Still not sure what cashout refi is? Simple: A cash-out refinance lets you get rid of your old mortgage and replace it with a new one that has better conditions while also receiving an extra lump sum of cash. In essence, it involves taking out a new loan that is larger than the remaining sum on your mortgage.

If you're open to refinancing your home, a cashout refi may be your best option. Our partner, Quicken Loans, can help you get there. Provide your info here to compare rates and talk to a home loan expert.

Reverse Mortgage

To be eligible for a reverse mortgage, you have to be 62 or older and the home needs to be your primary residence, among other eligibility requirements.

A reverse mortgage may eliminate your monthly mortgage payments and allow you to turn your home equity into cash. The best part? You can remain in your home, safe in the security that your equity can provide.

If you're interested in reverse mortgages, our partner Finance of America may provide you with a Free Information Kit. Simply enter your info here and see if a reverse mortgage is the right move for you.

Bottom Line

If you're in need of some extra spending power, the value of your home can be a powerful tool. Leveraging your home equity could help you find more competitive interest rates compared to quicker lending options such as credit cards.

HELOCs, reverse mortgages, and cash-out refinancing could all be viable options to capitalize on your hard-earned home equity.