What is a home equity loan and what is the process to applying/being accepted for one?
Let’s say you owe around $70K for your house & it now appraises for $275K, you can “cash out” some of your equity. Equity is the difference between what you owe & what the home is worth or appraised at now. There are many programs for “cashing out” equity. You could get up to 100% of your equity out. I do not suggest this &your interest rate on your equity loan will be a lot higher. You could cash out say 80%, based on my #’s above that would total about $164,000. & you could use this money towards a down payment & for construction costs with the home you’re interested in building. You want to make sure you’re using your money with the best programs. Talk to a lender who will show you the pros & cons. Don’t use all of your liquid cash to sink into building a home, leverage, leverage, leverage & talk to the lender about a “Construction to Perm” loan.
