How to Release Equity From Your Home

Releasing equity from your home is possible by selling the property or borrowing against it.

Releasing equity from a home involves selling the home or borrowing against it. When selling a property, the owner receives cash left over after any mortgages are satisfied. With a home equity loan, the homeowner receives funds, and a first or second mortgage is then placed against the property.

Instructions

1. Determine the amount of equity in your home. If you have a first and/or second mortgage, your available equity will be the amount of your home's value not secured by financing. Subtract the amount you owe on your mortgage from the approximate value of your house. For example, if you owe $100,000 on a home worth $250,000, your available equity is $150,000. If you aren't sure what your home is worth, a basic value search will give you a fairly accurate estimate (see Resources).

2. Apply for a home equity loan or first mortgage. Contact a lender and make an appointment with a loan officer. As part of your loan application, you will need your two most recent W-2 forms, pay stubs and banking information. The loan officer will also arrange for your home to be appraised. An appraisal will cost you $250 to $500.

3. Consider selling your home to release its equity. Do a basic value search, or contact an experienced real estate agent to help you price your property correctly. When your home sells, you will receive funds after all liens (first and second mortgage) and real estate commissions are paid.

References

• 1st Step Mortgage Group

Resources

• Pioneer Real Estate Services
• Real Estate Value Search