For many homeowners, their home is more than just a place to live, it is also one of their most valuable assets. Over time, as you pay down your mortgage and property values increase, you build equity in your home. Tapping into this equity can provide financial flexibility and help you achieve various financial goals. Whether you’re looking to fund home improvements, pay for college tuition, or cover unexpected expenses, we are here to help you understand how to access your home’s equity.

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. For example, if your home is worth $500,000 and you owe $250,000 on your mortgage, you have $250,000 in equity.

Ways to Access Your Home Equity

First National Bank of Michigan offers several options to tap into your home’s equity, each with its own benefits and considerations:

1. Home Equity Loan
A home equity loan allows you to borrow a lump sum of money based on the equity you’ve built in your home. This type of loan has a fixed interest rate and a set repayment term, making it a predictable option for homeowners who need a large amount of cash for specific expenses like home renovations or education costs.

2. Home Equity Line of Credit (HELOC)
A HELOC is a revolving line of credit that works similarly to a credit card. You can borrow as much or as little as you need up to a certain limit, and you only pay interest for the amount you use. HELOCs have variable interest rates, making them a flexible option for ongoing expenses such as medical bills or business investments.

3. Cash-Out Refinance
With a cash-out refinance, you replace your existing mortgage with a new, larger loan, allowing you to receive the difference in cash. This option is useful if you want to take advantage of a lower interest rate than a HELOC while accessing the equity in your home. Contact us today for a specialized proposal to meet your needs.

Final Thoughts

The equity in your home can be a powerful financial tool. Let us help to create a customized proposal that best aligns with your financial goals. Contact a dedicated First National Bank of Michigan Residential Loan Officer to explore the best solution for your situation. Together, We are First.

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