Put Your Home to Work for Your Goals: Accessing Cash Tied Up in Home Value

For many homeowners, their largest financial asset is also their most illiquid. If you need funds for major expenses, debt consolidation, or unexpected investments, learning how to access cash tied up in home value can provide a powerful borrowing solution. Rather than liquidating long-term investments or resorting to high-interest unsecured loans, homeowners can unlock their property’s wealth through strategic home equity borrowing. By comparing a lump-sum home equity loan (HELoan), an adaptable home equity line of credit (HELOC), and a cash-out refinance, you can convert your built-up illiquid home equity into usable capital with lower interest rates and flexible repayment options that fit your financial goals.

• American homeowners have access to $11.5 trillion in tappable home equity as an added financial resource.
• Multiple loan options let you unlock equity without giving up your low first mortgage rate.
• Home equity loans, HELOCs, cash-out refinances, and CES loans can fund home improvements, education, debt consolidation, emergencies, and more.
• Understanding the differences in loan types can help you make informed borrowing decisions.
• Reach out to your lender to find the home equity solution best suited to your financial goals.

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Fast Home Equity Access: Fully Amortizing HELOCs with 5-Day Funding

“Unlocking your home’s value doesn’t have to be a lengthy or complicated process. With our 100% online application, you can bypass traditional bank delays and secure funding in as few as 5 days. Whether you are looking for a standalone HELOC to renovate your kitchen or consolidate high-interest debt, our product is designed for immediate impact with a required 100% initial draw at closing . Unlike other equity products, these loans are fully amortizing throughout the entire term, meaning there are no interest-only periods and you build equity with every monthly payment. To ensure you choose the right path for your budget, review our HELOC application checklist to see how flexible draw periods can provide ongoing financial security based on your specific loan term .”

What is Home Equity?

Home equity is the difference between your home’s current market value and the amount you still owe on your mortgage. It’s a form of wealth built over time and a valuable asset you can tap into to meet your financial needs.

Today, American homeowners are sitting on a record $17.6 trillion in home equity, with over $11.5 trillion considered “tappable” This means a significant portion of your home’s value can be borrowed against while maintaining a healthy equity cushion — typically 20% of your home’s value remains untouched.

Why Does Your Home’s Equity Matter?

Today, many homeowners face the “lock-in effect.” This happens because they secured their primary mortgage at ultra-low rates during the pandemic — often under 4%. With current mortgage rates around 7%, the thought of selling or refinancing causes some homeowners to feel stuck, even though they have substantial equity.

Fortunately, certain loan options now allow you to access this equity without sacrificing your low first mortgage rate — creating new financial flexibility. Learn more about our home equity solutions.

Fast Home Equity Access: Fully Amortizing HELOCs with 5-Day Funding

“Unlocking your home’s value doesn’t have to be a lengthy or complicated process. With our 100% online application, you can bypass traditional bank delays and secure funding in as few as 5 days. Whether you are looking for a standalone HELOC to renovate your kitchen or consolidate high-interest debt, our product is designed for immediate impact with a required 100% initial draw at closing . Unlike other equity products, these loans are fully amortizing throughout the entire term, meaning there are no interest-only periods and you build equity with every monthly payment. To ensure you choose the right path for your budget, review our HELOC application checklist to see how flexible draw periods can provide ongoing financial security based on your specific loan term .”

Options to Tap into Your Home’s Value

Home Equity Line of Credit (HELOC)

A HELOC works like a credit card: a revolving line of credit typically with lower payments during the draw period with you paying interest only on the amount of funds you use.

During the draw period, you can borrow, repay, and borrow again without needing to reapply. After that, a repayment period (10 years from loanDepot) begins, during which you repay both principal and interest.

Key Features:

• Draw Period: May vary, depending on your lender (loanDepot offers a 3-year draw period); borrow as needed up to your approved limit.
• Repayment Period: Typically lasts 10 to 20 years after the draw period ends.
• Interest: Variable rates based on market conditions, your credit score, and loan-to-value ratio.
• Flexibility: Make principal payments to reduce your balance and re-borrow as needed.
• Costs: May include origination fees and closing costs.

This flexible option is ideal for ongoing or unpredictable expenses, such as phased home renovations or educational costs.

Cash-Out Refinance

A cash-out refinance replaces your existing mortgage with a new, larger loan — allowing you to access the difference as cash.

Your new loan pays off the current mortgage balance, and you “cash out” the remaining funds, up to the lender’s maximum loan-to-value (LTV) ratio. This option offers a large lump sum, while you potentially benefit from the new loan terms.

Key Features of a Cash-Out Refinance:

• Loan Replacement: You receive a new first mortgage, paying off your existing loan in full.
• Cash Access: Borrow more than your current mortgage balance and pocket the difference.
• Fixed or Variable Rates: Available depending on lender terms and your financial profile.
• Useful for: Large, one-time expenses — like major renovations, tuition, or high-interest debt payoff.
• Considerations: You’ll likely lose your existing low mortgage rate, which may be a factor if current rates are significantly higher.
• Costs: Typically includes closing costs similar to a standard mortgage.

A cash-out refinance is beneficial when your existing rate is close to current market rates, and you want maximum cash upfront in one transaction.

Home Equity Loan

A Home Equity Loan (often called a second mortgage) allows you to borrow a lump sum against the equity you’ve built in your home — without disturbing your existing first mortgage.

Because it’s secured by your property, a Home Equity Loan typically offers a lower interest rate than unsecured options like credit cards and even some personal loans.

Key Features of a Home Equity Loan:

• Lump Sum: Receive the full loan amount upfront — ideal for large, one-time expenses.
• Fixed Interest Rate: Lock in a stable rate for the life of the loan.
• Fixed Repayment Term: Predictable monthly payments make budgeting easier.
• Useful For: Home renovations, debt consolidation, or major life expenses such as weddings, medical bills, etc.
• Keeps First Mortgage Intact: Functions as a Closed-End Second (CES) Loan, so your low first mortgage rate stays unchanged.
• Reapplication Needed: If you need additional funds later, you must apply for a new loan — unlike a HELOC.
• Costs: May include closing costs and fees, depending on the lender.

A Home Equity Loan offers a stable, budget-friendly way to leverage your home’s value — especially when refinancing your entire mortgage isn’t ideal. Find out how this flexible solution might fit your financial goals.

Ways to Use Your Home Equity

• Home Renovations & Improvements: Potentially boost your home’s value and comfort while funding upgrades affordably.
• Tuition & Education Expenses: Fund various college costs without relying on high-interest student loans or credit cards.
• Medical Bills & Healthcare Costs: Help manage unexpected medical expenses with lower-interest financing options.
• Supporting Aging Parents: Provide financial support to your parents without depleting your savings.
• Debt Consolidation: Combine high-interest debts into a single, lower-interest payment to save money.
• Emergency Cash Reserve: Access funds quickly during emergencies for peace of mind and financial security.

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FAQs: What You Need to Know Before Borrowing

How much equity do I need to access cash from my home?

Typically, lenders require you to keep at least 20% equity in your home after borrowing.

What’s the difference between a home equity loan and a HELOC?

Home equity loans provide a fixed lump sum with fixed monthly payments, while HELOCs offer a revolving line of credit with variable interest rates and payments.

What are the risks of using my home equity?

Because your home is collateral, failure to repay can result in foreclosure. It’s important to borrow responsibly and understand your repayment obligations.

How long does it take to get a home equity loan or HELOC?

Many modern lenders can make decisions in a short time, and funds can be available within a few weeks.

Put Your Home to Work with Your Financial Goals!

Your home’s equity is a powerful financial tool — one that can help fund your dreams, ease financial burdens, and give you peace of mind. With a variety of equity solutions available, right now is a great time to explore how to unlock your home’s potential.

Ready to get started? We can discuss your options and find the right home equity product tailored to your goals. Whether it’s a home equity loan, a HELOC, or a cash-out refinance, tapping into your home’s value can put you on a path that aligns with your financial goals.

* loanDepot.com, LLC does not provide legal, investment, accounting, or tax advice, please consult a licensed attorney, financial planner, CPA or tax professional on any information or opinions contained herein.

The loanDepot HELOC has a variable interest rate based on an index (WSJ Prime Rate) plus a margin set by the lender. Your APR will not exceed 18.00% at any time during the term of your account (could vary based on limits imposed by state law).  Amount of line of credit depends on your property equity and lien position of the HELOC. There are no third-party fees. Minimum payment will be at least $100. The origination fee will be up to 5% of the line amount, or the maximum allowed by state law, whichever is less. A HELOC requires you to pledge your home as collateral and you could lose your home if you fail to repay. Offers, rates and fees are subject to change without notice. Credit criteria, exclusions, and limitations apply. The loanDepot Texas HELOC has a 30-year term: a 3-year draw period and interest only period and a 27-year repayment period. The minimum monthly payment during the first 3 years is interest only and is fully amortized over 324 months during the repayment phase. For all other states, the HELOC has a 30-year term which includes a 3-year draw period (within a 10-year interest only period) and 20-year repayment period. The minimum monthly payment during the first 10 years is interest only and is fully amortized over 240 months during the repayment phase. Available funds are accessible via ACH/Wire. The loanDepot first lien HELOC is only available on free and clear properties. Properties with existing recorded mortgage lien(s) are not eligible and payoffs of existing mortgage liens are not available.  

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