If you’ve owned your home for a while, odds are you are sitting on home equity. At the end of the second quarter of this year, the average homeowner with a mortgage had $307,000 of equity in their home, according to Cotality. Of that amount, an average of $205,000 was “tappable” — the amount lenders will allow a homeowner to borrow while maintaining a 20% equity stake in their home.
With a home equity loan or a home equity line of credit (HELOC), you can draw on your equity for just about anything — to fund your business, pay off high-rate debt or update your home, to name a few. And because home equity loans and HELOCs are secured by your home, they typically come with lower interest rates than credit cards or personal loans.
