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Step 1
Determine the amount of equity you have in your home. Take your home's current value (which you can obtain from an appraisal of the property) and subtract the current mortgage balance. This is the equity in your home, which you can borrow against.
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Step 2
Find home equity loan lenders online. Most mortgage lenders provide home equity loans as well. Determine what the average lending rate each lender is offering currently.
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Step 3
Use a mortgage calculator to determine the monthly cost of the loan, based on the interest rate the lenders are offering to you. These calculators are available online for use without obligation or cost. You need the amount of money you are borrowing, the interest rate charged and the length of time you'll hold the loan (the term).
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Step 4
Calculate the monthly payment of the loan if you changed the term from 48 months to more, or less. Find the best monthly payment for your needs. As you extend the term, you increase the amount of interest you pay on the term over time.
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Step 5
Consider a home equity line of credit which has no fixed term, but offers an open line of credit you can borrow from and pay back over time. Calculate the cost to you monthly using the same online calculators.
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Step 6
Get estimates from home equity loan lenders on their rates which are based on your credit score. The lenders will ask questions and need verifications on your personal identity and finances. Compare several lenders and choose the most affordable.
