Home equity questions, answered plainly

Home equity is the difference between what your home is worth and what you still owe on it. If your home would sell for $600,000 and your mortgage balance is $350,000, you have $250,000 in equity. Lenders let you borrow against part of that, never all of it. The equity calculator at the bottom of this page shows your estimate in about a minute.

There are three main ways. You can open a HELOC (home equity line of credit), take a home equity loan, or do a cash-out refinance. The first two are second loans that sit behind your current mortgage and leave it alone, while the third replaces your mortgage with a bigger one and hands you the difference. Our guide to pulling equity out of your home walks through all three, or call (916) 755-6080 and we will talk it through.

A HELOC (home equity line of credit) works like a credit card secured by your house. You draw what you need, pay interest only on what you use, and the rate usually moves with the prime rate. A home equity loan hands you one lump sum at a fixed rate with a set monthly payment until it is paid off. Our comparison page lays them side by side.

A cash-out refinance replaces your current mortgage with a new, larger one, and you receive the difference in cash at closing. You end up with one loan and one payment, at today's rate on the entire balance. That trade usually only makes sense if your current rate is already close to what is available now. Call (916) 755-6080 if you are unsure which way the math goes for you.

Lenders cap the combined total of your mortgage and the new loan at a percentage of your home's value, called the combined loan-to-value, or CLTV. Your borrowing room is that cap minus what you already owe. The exact cap depends on the program, your credit and the property. Run the equity calculator below for an estimate, then call for the real figure.

Not with a HELOC (home equity line of credit) or a home equity loan. Both are second loans, so your first mortgage, its rate and its payment stay exactly as they are. A cash-out refinance is the one option that replaces your rate. See our page on getting equity without refinancing.

Four things, mainly. How much equity you have, your credit history, your debt-to-income ratio (DTI, your monthly debt payments compared to your monthly income) and how your income is documented. Different programs weigh these differently, which is why we route each file to the one that fits. Call (916) 755-6080 for a quick read on where you stand.

Yes. Unified Home Loans offers a bank statement home equity loan that qualifies you on twelve months of business bank statements instead of tax returns. Your deposits are the income verification; we add them up and treat a portion as income to allow for business expenses. Read the bank statement home equity loan page or call to see if it fits.

Yes, on an investment property you do not live in. Our DSCR second mortgage qualifies on the property's debt service coverage ratio (DSCR), which compares the gross rent to the full property payment including the new loan. No personal income documentation is required, and it is a business-purpose loan. The DSCR second mortgage page explains how it works.

Some form of valuation is almost always needed, since the loan is based on what the home is worth. Many second-lien programs accept an automated valuation or an exterior-only report instead of a full interior appraisal, which is faster and cheaper. The program and the loan size decide which one applies. We will tell you up front on the call.

No. Using the calculators on this site or calling us does not touch your credit. We only pull credit after you decide to apply and give us permission, and we will tell you before it happens. Start with the calculator below.

You can usually refinance the existing second into a new one, or in some cases add a third lien, although fewer lenders offer that. The combined balance of everything on the house still has to fit the program's loan-to-value cap. Have the balance and payment on your current second handy and call (916) 755-6080; we will map it out.

The draw period is the first phase of a HELOC (home equity line of credit), commonly ten years, when you can borrow, pay down and borrow again. Many programs allow interest-only payments during this phase, so the required payment can be low. Our HELOC guide covers the full timeline.

The line closes to new borrowing and the balance converts to a repayment schedule, commonly ten to twenty years. Your payment usually rises because you are now paying principal and interest instead of interest only. If you still carry a balance then, refinancing it into a fixed home equity loan is one common move. Call (916) 755-6080 to plan for that moment.

Commonly, yes. A home equity loan (sometimes called a HELOAN) is a lump sum at a fixed rate that fully amortizes over a set term, often ten to thirty years. The payment you start with is the payment you end with. Our home equity loan page has a payment calculator that shows what a given amount costs per month at a rate you choose.

Costs vary by program and lender and may include a valuation, title work, recording fees and lender fees. Some HELOC (home equity line of credit) programs cover most closing costs if you keep the line open for a set period. We give you a written estimate before you commit to anything. Ask on the call.

Interest on home equity debt may be deductible in some cases, generally when the money is used to buy, build or substantially improve the home that secures the loan. Rules change and depend on your situation, so ask a tax advisor before counting on it. We can explain how the loan works, and your tax advisor can tell you how it affects your return.

Mostly, yes. Lenders rarely restrict how you use a HELOC (home equity line of credit) or home equity loan on the home you live in. The exception is the DSCR (debt service coverage ratio) second mortgage, which is a business-purpose loan on investment property. Tell us the goal on the call and we will match the product to it.

Renovation is the most common use. A HELOC (home equity line of credit) fits a project paid in stages because you draw as bills come due, while a home equity loan fits a fixed-bid job you pay for once. Improving the home can also matter for the tax question above. Run the equity calculator to see how much room you have.

You can, and the rate is often lower than credit cards. Be clear about the trade. You are moving unsecured debt onto your house, so if you fall behind, the home is at risk, and stretching the payoff over many years can increase total interest even at a lower rate. Our loan officers will show you both sides before you decide.

Yes. Pulling equity from your current home is a common way to fund a down payment on a rental. Many investors use a HELOC (home equity line of credit) so they only pay interest once the purchase actually closes. Call (916) 755-6080 to line up the timing with your purchase.

Yes. An ADU (accessory dwelling unit, such as a backyard cottage or garage conversion) is an expensive build, and a HELOC (home equity line of credit) lets you draw as construction progresses. Once finished, the added rent and value may improve your position. Start with the equity calculator below.

A second lien usually closes faster than a full refinance, often a matter of weeks from application to funding, though timing depends on the valuation type and how quickly documents come in. A cash-out refinance takes longer because it is a full first mortgage. We give you a realistic timeline on the first call.

For a standard program, expect a photo ID, your current mortgage statement, proof of homeowners insurance and income documents such as pay stubs, W-2s or tax returns. Bank statement and DSCR (debt service coverage ratio) programs swap the income documents for twelve months of business bank statements or a lease and the property's expenses. We send a short checklist after the first call.

Yes. You can start online and upload documents through a secure portal. Most clients still talk to a loan officer at least once, because choosing between a HELOC (home equity line of credit), a home equity loan and a cash-out refinance is a judgment call. Call or text (916) 755-6080 whenever you are ready.

A loan officer at Unified Home Loans reviews what you entered and calls or texts you, usually the same business day. That first conversation is about your goal and your numbers, with no credit pull and no pressure. If a product fits, we explain the next steps and you decide.

Unified Home Loans, a mortgage broker and correspondent lender based in Roseville, California, company NMLS 1965830. Our loan officers write and review every page. The site exists to give homeowners a number before anyone asks for a phone number. The About page has the full story.

No. What you enter is used only so a loan officer at Unified Home Loans can follow up with you. We do not sell it or pass it to other lenders or lead companies. The privacy section of the About page spells it out.

Our licensing is listed on the About page and can be verified on NMLS Consumer Access under NMLS 1965830. If we are not licensed where your property sits, we will say so on the first call. Call (916) 755-6080 to check.

A broker places your loan with a wholesale lender, while a correspondent lender funds the loan in its own name and then sells it. Unified Home Loans does both, so we can route a file to whichever program fits instead of forcing it into one lender's box. For home equity, that means more options for self-employed borrowers and investors. Ask us which path we would take for yours.