Unlock the Power of Your Home’s Equity
đź•’ 2-minute read
At Rave Financial Credit Union, we’re here to help you make smart financial choices—starting with understanding one of your biggest assets: your home. Whether you’re planning renovations, covering major expenses, or simply building your financial future, tapping into your home equity could be a powerful option.
What Is Home Equity?
When you purchase a home, you usually take out a mortgage that covers the cost after your down payment. Over time, as you make monthly payments, you own more of your home. That ownership builds equity—the portion of your home’s value that’s truly yours.
Think of equity as the value of your home, minus what you still owe on your mortgage. For example, if your home is worth $200,000 and you owe $180,000, your equity is $20,000. It’s that simple!
Why Equity Matters
Your home equity isn’t just a number—it’s a financial resource. You can borrow against it or cash it in if you decide to sell your home. Many of our members use home equity to fund home improvements, pay for college, or consolidate higher-interest debt.
Finding Out What Your Home Is Worth
Keep in mind: your home’s value can shift with the market. What you paid for it years ago may not match what it’s worth today. To get a current estimate, reach out to a local real estate agent for a market analysis—it’s often free and gives you a clearer picture of your home’s potential selling price.
How Much Can You Borrow?
Most lenders, including Rave Financial, allow you to borrow up to 80% of your home’s value, minus what you still owe. So if your home is worth $200,000, the total amount of your mortgage and any equity loans combined can’t exceed $160,000. If you owe $150,000, that means you may be able to borrow up to $10,000.
It’s not about your original loan amount—it’s all about what you currently owe.
Will You Need an Appraisal?
Depending on your home’s value and your loan needs, you may or may not need an appraisal. Some situations require one to verify your home’s worth, while others don’t. Appraisals can range from quick online estimates to in-person visits from a professional, and costs vary.
When you connect with a Rave Financial Lending Expert, we’ll walk you through whether an appraisal is needed, what to expect, and how to compare options. We’re here to help every step of the way.
Ready to Put Your Home Equity to Work?
Reach out to us today, and let’s talk about how your home can help you reach your financial goals, with people you trust.