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Dorchester Center, MA 02124
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Congratulations on paying off your home! Without the burden of a monthly mortgage payment, you might find yourself needing funds for unexpected expenses, home renovations, or other purposes. If your savings fall short, consider tapping into your home equity. O1ne Mortgage is here to guide you through the process and help you make informed decisions.
With your home fully paid off, you have 100% equity. Most lenders, including O1ne Mortgage, allow you to borrow up to 80-85% of your home’s equity. For example, if your home is valued at $450,000, you could potentially borrow up to $382,500.
Here are some options to consider:
A home equity loan is a fixed-rate installment loan that allows you to borrow up to 80% of your home’s equity. Some lenders may even extend this to 100%. You’ll receive a lump-sum payment to use as needed and repay the loan in fixed monthly installments.
A HELOC functions like a credit card, offering a revolving line of credit with variable interest rates. You can draw funds as needed during the draw period, typically 10 years, and make interest-only payments. After the draw period, you’ll enter a repayment phase, usually over 20 years.
A cash-out refinance allows you to convert your home equity into cash by replacing your current mortgage with a new, larger one. If your home is paid off, you can receive up to 80% of your home’s value as cash.
Before deciding to borrow against your home, consider the following:
Borrowing against your home equity can provide the funds you need, but it comes with risks, including the potential loss of your home. Your credit score and history will significantly impact your ability to secure favorable terms. Before proceeding, check your credit report and score to determine if this option is right for you.
For personalized advice and to explore your options, call O1ne Mortgage at 213-732-3074. We’re here to help with all your mortgage-related needs.
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