Your house is not an ATM
Equity is valuable. Before we talk about how to access it, the first question is always why.
- No application required
- No credit pull to talk
Should I use my home equity?
Your house has a value. You owe money against it. The difference between those two numbers is basically the equity you have in the home. That does not mean all of it is cash you can take out, but that is the simple idea.
The first question is never which product. It is why. What are we using the money for? What does the new debt look like? How does this fit the rest of your finances?
Equity is valuable. There should be a reason behind using it.
When we tell somebody not to
Sometimes after talking it through, a person realizes they are solving a short-term problem by creating a bigger long-term one. When that happens we say so.
The reasons people ask about equity are usually debt consolidation, renovations, a large expense, an investment, or wanting liquidity available. Each of those is a question worth examining rather than a use case we would endorse in advance.
Why you want to use it, before anything about how.
What the money is for. What the new debt would look like. How it fits with the rest of your finances. Whether it solves the actual problem or moves it. And whether doing nothing is the better answer right now.
Why comes before how
What should I think about before borrowing against my home?
Why. That is always the first question.
What are we using the money for. What does the new debt look like. How does this fit into the rest of your finances.
Your house is not an ATM. Equity is valuable, so there should be a reason behind using it. That is not a lecture, it is the difference between a decision you are glad you made and one you inherited from a phone call.
When would you tell somebody not to?
When the reason does not hold up.
Sometimes it is because nobody can explain what the money is for. More often it is because, once we talk it through, the person realizes they are solving a short-term problem by creating a bigger long-term one.
Sometimes the best mortgage advice anybody can give is that you should not change anything. That is a completely acceptable outcome, and you will not be talked out of it here.
Tell us what you are trying to do
- Tell us what you are trying to do - Not what product you want. What you are actually trying to accomplish.
We look at your situation
- We look at your situation - A licensed Align loan officer works out what matters most for you specifically.
You leave with a plan
- You leave with a plan - Your options, the tradeoffs, and your next step. No obligation to go further.
Questions people actually ask
What happens if I do not borrow it?
Sometimes that is the right answer, and it belongs on the table next to the others. Sometimes the most useful mortgage advice is that you should not change anything. Doing nothing is a legitimate outcome, not a failure to decide.
What is equity in plain terms?
What your home is worth, minus what you owe against it.
Can I access equity without selling?
There are ways to, yes. Which one fits depends entirely on what you are trying to do.
Should I use equity to pay off credit cards?
Sometimes that makes sense and sometimes it moves a short-term problem into a long-term one. It depends on the whole picture.
How much of my equity can I actually use?
Not all of it, and the amount depends on the property, your situation and the approach. That is a conversation, not a formula.
When is using equity a bad idea?
When nobody can clearly explain why you are doing it.
What is equity, in plain terms?
Your house has a value. You owe money against it. The difference between those two numbers is basically the equity you have in the home. That does not mean all of it is automatically cash you can take out, but that is the simple idea.
Do I have to use it just because I have it?
No. Having equity is not a reason to access equity. The reason has to come from what you are trying to accomplish.
What if I am not sure it is a good idea?
Then say that. Working out whether something is a good idea is most of the conversation, and leaving it alone is a legitimate place to land.
Align Lending LLC, NMLS #2041154. Samantha Shelton, NMLS 1647301. Equal Housing Opportunity. Licensed in Michigan, Ohio, North Carolina, Florida, Louisiana and Texas. This page is for educational purposes only. It is not a credit decision, a preapproval, a commitment to lend, or an offer of credit, and it does not evaluate your eligibility for any loan program.
