What Can I Do With My Home’s Equity?

After finding out you have significant equity in your home, you’re faced with a few options. Home equity can be a great source of financing and savings for homeowners, so it’s important to know your options. You can reinvest the equity into your home through home improvements, you can sell the home to cash in on the equity, you can use it to refinance out of PMI or to get a lower monthly payment, or you can take it out as cash in a cash-out refinance to use for a large purchase or as a loan to yourself.What Can I Do With My Home’s Equity?

Because it’s such a big financial decision that will have consequences, positive or negative, for years to come, it makes sense to consider the choice from many angles. Ultimately, it makes the most sense to think through your options and then reach out to a mortgage professional who can walk you through the process.

Refinancing to Lower Monthly Costs

If you have significant equity in your home, you may benefit from using it to refinance out of your PMI payments. You may also be able to bring your monthly payment down if you apply your equity toward your principal.


A Home Equity Loan (HEL) allows you to borrow a lump sum of cash from your equity, which you begin to repay immediately with monthly payments that have a fixed interest rate. Some will use this as a way to finance their kids’ college in place of student loans, or to finance a remodel or home improvement project.


One of the most common ways to capitalize on home equity is to get a HELOC, a Home Equity Line of Credit. This is a variable rate home equity loan that works in many ways like a credit card. During a set draw period, typically about ten years, you can pull whatever you need from your home equity and make interest-only payments. At the end of the draw period, you’ll then begin to repay the balance, typically over the next ten to twenty years. Many people use this as a way to finance a career change or home improvement project.

Cash-Out Refinance

When you choose cash-out refinancing, you’ll end up with an entirely new mortgage for a higher principle, and the difference between your original mortgage and your second mortgage will be given to you as cash. There is an element of risk here, as you are essentially purchasing your home for a higher price and are counting on your local real estate market remaining stable or growing in order to remain in a good financial position. The benefit of a cash-out refinance is obvious: a lump sum of cash in your hands to be used for big purchases, home projects, financing a lifestyle change, investing, or anything else you’d like.

 Want to tap into that equity? Give us a call. We have lenders on standby that can help at any time and of course, we can always help you sell your Granbury home or property. 

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