Cash Out or Tap Your Equity

Need to pay off another loan or credit cards? Thinking about remodeling your home, consolidating debt, or accepting that investment opportunity? Accunet offers you a means to tap into the equity you've already gained through your existing mortgage payments. It's easy - and Accunet can walk you through the process. Our application options are designed to cut through the hassle and get you the loan you need for your unique purposes.

There are three primary methods to tap into the equity in your home and get cash out. Accunet's streamlined loan process makes accessing the current equity in your home a simple and time-saving process, freeing up cash for other pursuits.

Your first option is to secure a new, larger first mortgage. The benefit of this is that first mortgages have lower rates than second mortgages or home equity lines of credit. The drawback is if you already have a great rate on your first mortgage, you probably don't want to give it up. Don't worry, we'll run the numbers for you to help you make the best decision. If your new first mortgage balance totals less than 70% of your home's value, you'll enjoy the same rate as if you were buying a home. If you take cash out and borrow between 71% and 80% of your home's value, the rate or closing costs will be just slightly higher. If you borrow more than 80% of your home's value, the rate will be a little higher still, and you may have to pay private mortgage insurance. Our home equity lines of credit and 2nd mortgage options give you another alternative to refinancing your first mortgage.

Your second option is to secure a fixed-rate second mortgage. It won't disturb your existing first mortgage, and you can enjoy the stability of a fixed-rate for the entire term of the loan. Alternatively, because rates are in "second position" and are therefore more risky to the lender than a first mortgage, rates on a second mortgage are higher than on a first mortgage. With this type of loan you have to borrow what you need up front, and as you pay down the balance on your second mortgage, you are not able to reuse that equity unless you refinance again. Rates on fixed-rate second mortgages will depend on four factors - your credit score - the higher the better; the amount of equity remaining in your home - the more the better; the loan amount - the bigger the better; and the repayment term you choose.

Your third option is to get a home equity line of credit. As the name implies, a home equity line of credit is a flexible way to tap the equity in your home. The benefit of this is that you don't need to use the line of credit until you need it. Once you're approved for a certain line amount, you become "the bank." When you need to access cash, just write a check against the line of credit. And when you do carry a balance, all you have to do is pay the interest each month, so payments are lower than on a fixed-rate second mortgage where you pay both principal and interest. The only drawback is that the rate is variable ,based on the Prime Rate, and will change whenever the prime rate changes. However, with Accunet's unique line of credit, you can lock in the rate on a portion of your line of credit and still have access to the rest of your equity borrowing power on the variable-rate portion of your line.

Sometimes the best strategy is a combination of a combination of the above options. You can always check out our loan type comparison page, but your best bet is to speak with one of our loan consultants on the phone. They are ready to answer any questions you may have at 877-299-9797. Get specifics with our rate and closing estimator. And remember to match the terms of your loan with your plans for the money. Financing your kitchen remodel over 30 years is a good tactic, because your kitchen will last that long. On the other hand, using equity to pay to take the family to Aruba isn't such a good idea. Your vacation will be over in a week, but you'll be paying for it for years to come.