2. WHAT IS A HOME EQUITY LOAN?
Real estate usually appreciates over time, so the chances are the value of your home has increased since you bought it. By obtaining a Home Equity Loan or Mortgage, you can get access to money based on the increased market value.
You can calculate how much you can borrow with a home equity loan by using the following equation:
PRESENT VALUE OF YOUR HOME – THE AMOUNT OWING ON YOUR MORTGAGE = HOME EQUITY
If you bought a home 20 years ago for $400,000 and have paid $250,000 of your first mortgage you now only have $150,000 remaining to pay.
Over the twenty years that you have owned the home, its value has increased, giving it a present-day value of $850,000. By taking the present-day value and subtracting the amount remaining on your mortgage, you will get your home’s equity.
$850,000 (PRESENT DAY VALUE) – $150,000 (AMOUNT REMAINING ON INITIAL MORTGAGE) = $700,000
With MASS Mortgage Group’s home equity loan, you can have access to a portion of your home’s equity within ten days.