How to Refinance Using a Home as Collateral

Refinancing could present a method to use your home as collateral for cash-out purposes or for a small business loan. A home mortgage lender may provide you with the proceeds you need if your home has enough equity to meet your goal. Generally, you’ll need to present sufficient credit and income to qualify for the type of loan you need.


    • 1

      Locate the approximate value of your home. Use online valuation tools to view the estimated value for your home (see Resources). Review selling prices of recently sold properties in your area that compare to your home in size and features.

    • 2

      Visit neighborhood banks and credit unions to discuss obtaining a loan against your home, as well as online lending sources (see Resources). Inform a loan officer of the purpose for your loan request. Mention refinancing to pay off an existing loan, while using your home as collateral for a new loan. Provide details about your home, its estimated market value and the approximate amount owed on your mortgage loan.

    • 3

      Apply for a home mortgage loan. Provide personal information, such as your Social Security number and your home address to enable the banker to perform a credit check. Complete any remaining forms the bank requires.

    • 4

      Meet with a home appraiser. Your banker should arrange for an appraiser to check the basic condition and value of your home. Clean the inside and outside areas of your home before the appraiser arrives. A neat home may enhance the collateral value of your property, as curb appeal and condition could impact your home’s value.

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