How do you Release Equity from your House?

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If you’ve never done it before, you may be unsure how much equity is in your home, and also how you can go about releasing it. With our straight forward guide, its actually very simple.

To determine how much equity is currently in your property

Do you have a mortgage on your home?

If you do, you can easily work out the amount of equity available to release, by subtracting the amount you still owe on your mortgage (or mortgages) from the approximate value of your house. For house valuations, please see the post how to value your house for equity release.

If1 .Determine the amount of equity in your home. If you have a first and/or second mortgage, your available equity will be the amount of your home’s value not secured by financing. Subtract the amount you owe on your mortgage from the approximate value of your house. For example, if you owe £100,000 on a home worth £250,000, your available equity is £150,000. If you aren’t sure what your home is worth, a basic value search will give you a fairly accurate estimate (see Resources).

2 .Apply for a home equity loan or first mortgage. Contact a lender and make an appointment with a loan officer. As part of your loan application, you will need your two most recent W-2 forms, pay stubs and banking information. The loan officer will also arrange for your home to be appraised. An appraisal will cost you $250 to $500.

 

3 .Consider selling your home to release its equity. Do a basic value search, or contact an experienced real estate agent to help you price your property correctly. When your home sells, you will receive funds after all liens (first and second mortgage) and real estate commissions are paid.

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