Leveraging the Equity in Your Home

Each monthly mortgage payment you make increases the equity you have in your home. At the same time, if the value of your home increases due to favorable housing markets, your home may be worth more than when you bought it. Through refinancing, you can free up some of this money for other purposes.

There are many reasons people take equity out, ranging from paying for a child’s college tuition to paying of debts that have non-tax-deductible interest costs (the interest on home loans is tax deductible). Other reasons include funding home improvement projects or buying a second vacation home. Taking equity out of your home is not the same as taking a home equity loan. When you take a home equity loan, you are basically taking out another loan on your property.