Home Equity Loan & HELOC Guide: How to Tap Into Your Home’s Value
Your home is likely your biggest asset. Over time, as you make mortgage payments and property values rise, you build equity. But did you know you can use that value to fund home renovations, consolidate high-interest debt, or cover major life expenses?
At Doos Mortgage, we offer two powerful ways to access your cash: the Home Equity Loan (HELOAN) and the Home Equity Line of Credit (HELOC). Here is everything you need to know to choose the right one for your goals.
HELOC vs. HELOAN: Which is Right for You?
1. Home Equity Line of Credit (HELOC)
Think of a HELOC like a credit card secured by your home. It’s a flexible line of credit that you can draw from as needed.
- Best For: Ongoing projects with uncertain costs (like a long-term remodel) or an emergency safety net.
- Pay for What You Use: You only pay interest on the amount you actually spend.
- Flexibility: Draw funds, repay them, and borrow again during the “draw period.”
2. Home Equity Loan (HELOAN)
A HELOAN is a traditional “second mortgage” that provides a one-time lump sum of cash.
- Best For: Large, one-time expenses where you know the exact cost upfront (like debt consolidation or a major roof replacement).
- Predictable Payments: You get a fixed interest rate and set monthly payments for the life of the loan.
- Rate Security: You are protected from future market rate hikes.
Eligibility: Do You Qualify?
To tap into your equity, lenders typically look for the following:
- Sufficient Equity: You generally need a Combined Loan-to-Value (CLTV) ratio that leaves a cushion of equity in the home.
- Credit History: A history of on-time payments and a responsible credit score.
- Verifiable Income: Proof of stable income (Paystubs, W-2s, or Tax Returns) to support the new payment.
- Property Type: Eligible properties include primary residences (single-family homes, condos, townhomes) and occasionally second homes.
The Application Process
We’ve streamlined the process to make getting your funds as fast as possible:
- Consultation: We analyze your CLTV and financial goals to recommend the best product.
- Gather Docs: You’ll need ID, proof of income, your current mortgage statement, and homeowners insurance.
- Valuation: We manage the property valuation (appraisal or automated model) to confirm your home’s current value.
- Comparison: We check multiple lenders in our network to secure the lowest rates and fees for your specific profile.
Put Your Home to Work
Whether you want the stability of a fixed-rate loan or the flexibility of a line of credit, Doos Mortgage is here to help you unlock your home’s potential.