About the author:

Daniel H. Weberman, The Kabinet Founder – Terry I. Weberman, The Kabinet CPA

Daniel is an attorney and the founder of Kabinet. He is always here to help answer your home ownership questions as well as anything related to using your Kabinet app. Ask Daniel a question by sending an email to info@kabinet.com and put “Daniel” in the subject line. This is a complimentary service as part of Kabinet’s commitment to you! Terry is a Certified Public Accountant in the New York Metro area with experience working with businesses and individuals across all backgrounds. He writes articles for the Kabinet blog and is here to help you on your home ownership and/or investing journey. Ask Terry a question by sending an email to info@kabinet.com and put “Terry CPA” in the subject line. This is a complimentary service as part of Kabinet’s commitment to you!

Home equity is the difference between the market value of a home and the amount of debt that is owed against it. Home equity can be used as collateral for a loan, or as a source of funds for home improvements, debt consolidation, or other large purchases. It is important to note that the amount of home equity available will vary depending on the market value of the home and the amount of debt still owed. For example, if the market value of a home is $500,000 and there is a mortgage of $300,000 still outstanding, the home equity is $200,000.

Home equity can be accessed through a variety of methods, such as a home equity loan, a home equity line of credit (HELOC), or a cash-out refinance. Home equity loans are typically fixed-rate loans that are taken out for a specific period of time and are repaid in monthly installments with interest. A HELOC is a line of credit that is secured by the home’s equity and can be used for any purpose. Finally, a cash-out refinance is a type of loan in which the borrower refinances their existing mortgage, taking out a larger loan and using the difference to access their home equity.

Note

Daniel, The Kabinet Founder, has made every effort to ensure the accuracy of the information within this article was correct at time of publication. He does not assume and hereby disclaims any liability to any party for any loss, damage, or disruption caused by errors or omissions, whether such errors or omissions result from accident, negligence, or any other cause. Speak to your advisor to make sure you qualify for such benefits or opportunities. Do not rely solely on this abbreviated article, it is for informational purposes only. Terry, The Kabinet CPA, has made every effort to ensure the accuracy of the information within this article was correct at time of publication. He does not assume and hereby disclaims any liability to any party for any loss, damage, or disruption caused by errors or omissions, whether such errors or omissions result from accident, negligence, or any other cause. Speak to your advisor to make sure you qualify for such benefits or opportunities. Do not rely solely on this abbreviated article, it is for informational purposes only.