What can i do with the equity in my house?

Rea
we bought our house last october for 56000 and remodeled the whole thing and added a deck and a few other things and we are wanting to refinance so we will have equity. I was wondering with that could i do anything with it like buy a vehicle or how does that work exactly?

Keith
leave it there...in this economy, plan for the future!

Caroyln
If you actually have equity. Equity is basically the difference between what you owe on the house and what it is now worth. The first step would be to get your home appraised. If your house is worth more than what you owe, you may be able to pull the money out in either a home equity loan, or a home equity line. But with the economy the way it is, getting the loan might be difficult.

Dionna
unless you paid cash for your house you really don't have any equity.you would need to have you house appraise to add the value of your improvements but that won't add to your equity it will just change what your house is worth and raise your property taxes. good luck refinancing most lenders won't touch you right now without perfect credit and a house worth 80, 000.00 + good luck my friend

Delmy
First, it is possible that the work you performed did not result in any additional equity. Having said that, refinancing does not create equity - equity is the amount of ownership you have in the house based on present financing. For example, if you bought the house for $56, 000 and took out a mortgage for $50, 000, your equity is $6, 000 (amount house is worth minus what you owe). Let's assume that you are in a neighborhood where prices have not dropped and the work you did added $4, 000 to your appraised value. That brings the value to $60, 000, you still owe $50, 000, so you have equity of $10, 000. NOw, if you refinance and draw out some of your equity, you can only refinance up to 80% of the value of the house - multiply $60, 000 by .8, which is $48, 000. Since you still owe $50, 000, you would not be able to refinance and draw out your equity, since you are above the 80% loan to value.Be advised that if you are able to refinance and draw money out, you will be reducing your equity. Say your house is now worth $100, 000 and you owe $50, 000 - your equity is $50, 000. If you refinance up to 80% loan to value, you can refinance $80, 000, meaning after you pay off the first loan, you have $30, 000 in cash in packet that you can use for anything you want. However, your equity has declined by $30, 000 and you now have equity of only $20, 000 ($100, 000 appraised value minus $80, 000 loan).

Carolee
Hi, First, usually one refinances to lower the interest rate on your mortgage loan. In order to determine the amount of equity you have in the property, you would have to have the property appraised to see how much value you have added to the property. For simplicity sake, let's say your mortgage is $50, 000.00 and it appraised at $75, 000.00 with the improvements; you would have $25, 000.00 worth of equity which you can borrow against - usually called a second mortgage. Once you get the loan (depending on how much of that equity your lender is willing to finance), you can do anything you want with it (buy a car, improve the property, buy jewelry, etc.). But now your mortgage will increase by the amount you borrowed (for a $25, 000.00 equity loan, your mortgage total is now $75, 000.00).

Cornelius
how do you get equity by refinancing? that makes no sense - if the house in now worth 70, 000 with your remodeling, and your mortgage balance in 55, 000, then your equity is 15, 000. refinancing will not increase that figure any.you will not be able to refinance unless you have at least 20% equity already in the property and you will have to pay several $1000 in refi fees, so you will be LOSING equity if you refi.what you are talking about is pulling out your equity and why do you want to go deeper into debt in this economy?and they will still, not let you refinance more than 80% of your equity anyway, so unless your house has doubled in value, there wont be any equity in excess of teh 20% left to pull out - you should be thinking more of how you can pay off your mortgage in less than 30 yrs, not going deeper into debt

Chara
Just give it to obama hes going to take it anyway

Allene
You want to "refinance so you'll have equity"? You mean you want a "cash out" refi. What is the market value compared to your current loan balance?