Home Equity
Home equity borrowing uses the difference between your home's value and what you still owe. A home equity loan is a fixed lump sum with a fixed payment, while a line of credit lets you draw as needed at a variable rate.
Both are secured by the home, which is what keeps rates lower than unsecured borrowing and also what makes the risk of falling behind more serious.
Availability
Hire Best Pros is not connecting people with home equity professionals yet. This page is here as background reading while we work on it. Everything we do cover today is listed in our service directory.
What people usually need
- Funding a kitchen or bathroom remodel
- Roof, HVAC or other major system replacement
- Consolidating higher-rate debt
- Covering a large one-time expense
- Phased renovation work drawn over time
What to weigh before hiring
Your home is the collateral
Missed payments on equity borrowing can put the home at risk, unlike unsecured debt.
Fixed sum or flexible draw
A lump sum suits a project with a known cost. A line of credit suits phased work where the total is uncertain.
Watch the draw period ending
Lines of credit often shift to a repayment period where the payment rises noticeably. Know when that happens.
Common questions
- Which renovations hold value best?
- Work that addresses condition and core systems generally holds value better than highly personalized finishes. Our resource on renovation returns covers this in more depth.
- How much equity can I borrow?
- Lenders generally require you to keep a share of equity in the home, and the exact limit depends on the lender and the appraisal.
Related reading
- Which home improvements bring the best returnWhere remodeling money tends to hold its value, where it does not, and how to decide when you are staying rather than selling.
- Planning a kitchen remodelFrom deciding whether the layout moves to sequencing cabinets, counters and appliances, a practical order for planning a kitchen project.