Don't want to refinance? Here are 3 other ways to get equity out of your home

One of the biggest benefits of homeownership is the equity you build over time. Not only is that equity good for your finances overall, but it's a great resource for accessing cash when you need it. 

Typically, a cash-out refinance is a common choice to do this. It allows you to refinance your mortgage for a larger amount than you owe and take the difference as cash. But if you bought your home when rates were very low, you may be wary of refinancing in today's market and losing that great interest rate. 

But that doesn't mean your equity is inaccessible. Home equity lines of credit (HELOCs), home equity loans and reverse mortgages are all alternatives that homeowners may use to tap into equity without affecting their current mortgage rate. They offer lower rates than many other borrowing options today and can help you access the cash you need for home improvements, debt consolidation, emergencies and more.

Explore your home equity options here to see the low rates you can qualify for now.

3 ways to use home equity without a refinance

If refinancing isn't the right choice for you now, you can still taking advantage of the value you've built up in your home using these methods:

HELOC

A home equity line of credit (HELOC) can be a good choice if you're not sure exactly how you want to use the money or you want to access it at different points over time. When you're approved for a HELOC based on your current home equity and information in your application, you'll get access to a line of credit throughout a draw period (typically five to 10 years). 

You can use the line of credit however you want, and only borrow as much as you need during this period. Once the repayment period begins, which can be as long as 20 to 30 years, you'll pay back the amount you borrowed in full plus interest. 

HELOCs carry variable interest rates, so it will fluctuate over time. However, you'll still generally get a better APR with a HELOC than you'll find from personal loans or credit cards, since this line of credit is secured by the value of your home. 

Learn more about home equity lending options you're eligible for today! 

Home equity loan

A home equity loan is a standard lump sum loan that's also secured by the value of your home. This could be a good option for you if you have a large, one-time payment to finance.

Based on your application and existing home equity, you'll receive the loan in full after approval, and pay back your balance with interest in fixed monthly installments over time. Home equity loans carry fixed interest rates, which won't change throughout the lifetime of your loan. If rates drop significantly throughout your repayment period, you may have the option to refinance your loan under certain conditions.

You can use the money from your home equity loan in any way you'd like. However, with both home equity loans and HELOCs, your interest payments may be tax deductible if you use them for qualifying home improvements. 

Reverse mortgage

If you're a senior homeowner, you may have an additional option for tapping into your home equity. Reverse mortgages are available to homeowners aged 62 or older who have paid off all or a majority of their existing mortgage.

You can use the reverse mortgage to access your home equity without making any monthly payments. Instead, you'll receive the money as a lump sum or in monthly installments, and accrue interest and fees over time. While you don't need to pay back the reverse mortgage as long as you live in the home, it must be paid back when you move or die — usually by selling the home.

If you're eligible and plan to remain in your home for a long time, this could be a cost-effective way to access the equity you've built up.

Check out your mortgage options here now.

The bottom line

Homeowners who already have very low mortgage interest rates may be hesitant to use refinancing as a method to access home equity. But that doesn't mean they can't still take advantage of high home values. Depending on how much equity you have, how you want to use the money and the terms you can qualify for, a home equity loan, HELOC or reverse mortgage could be a great way to access cash at relatively low rates now.

Explore all the home equity options you can qualify for here now!