You could tap into your home equity with a cash-out refinance. But what if you already have a low rate on your mortgage?
Consider getting a home equity line of credit (HELOC) instead.
What is a HELOC?
A home equity line of credit, or HELOC, is a set amount of available cash that can be used at the accountholder’s discretion and repaid over time. It works much like a credit card but has a substantially lower interest rate on outstanding balances. The money withdrawn is a loan secured by the borrower’s home mortgage, so a default on a HELOC account can be disastrous.
With a HELOC, you can hold onto your low mortgage rate and still access funds to help pay for tuition, home renovations, high-interest credit cards, personal loans or whatever else you need it for!