Should You Tap into Your Home Equity?
By Laura Sellers, www.AuburnOpelikaALRealEstate.com
(Berkshire Hathaway HomeServices Preferred Real Estate, Inc.; www.AuburnOpelikaALRealEstate.com)
Should You Tap into Your Home Equity?Uncover the potential risks and rewards of tapping into your home equity. From understanding the best times to use your equity, to the pitfalls of other borrowing methods, it’s a nuanced exploration of financial decisions that shape homeownership. When you put 20% down on a home using a mortgage loan, you own 20% and the lender owns 80%. As you make payments, most of the money goes to pay interest while some goes toward reducing your principal. Meanwhile, favorable market conditions may be increasing the market value of your home, giving you instant equity. Equity is the amount of the home that you own, much like a savings account that pays interest on money you want to keep growing. After a few years, you may want to tap into that money to carry out...
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