Mortgage Options: How to Borrow Against Your Home Equity

When you purchase a house, your home’s equity becomes one of your assets. At the start, your equity is equal to your down payment. After a while, your home equity can grow if the value of your property increases. Another way to build up equity is by paying down your mortgage. 

Depending on your current equity, you can take money out and use it to finance large expenses like a wedding or to consolidate high-interest debt.

If you’re interested in getting a home equity loan, call or message us at Rancho Vista Mortgage, your preferred LA mortgage broker, for inquiries.

How to Borrow Home Equity

You can borrow against your home’s equity in three ways: a home equity line of credit (HELOC), a home equity loan, or a cash-out refinance. 

Using home equity is a bright option for borrowing cash because home equity money comes with lower interest rates. If you instead took out a personal loan or turned to credit cards, the interest you’d pay would be way higher.

Cash-out Refinance

A cash-out refinance is a mortgage refinancing option that takes advantage of the equity in your property & gives you cash in exchange for a new mortgage that’s bigger than the amount owed on your current mortgage. This new loan will pay off the existing mortgage, and you can use the remaining funds for your needs. The funds are tax-free because they’re deemed debt by the IRS. 

Home Equity Loan

A home equity loan, also known as a second mortgage, typically lets you borrow a lump sum against your current home equity for a fixed rate over a fixed period. Many people use home equity loans to finance big expenditures like paying for their child’s college tuition fee or house renovations.

Contact one of our mortgage professionals for assistance or more information about a home equity loan in LA.

Home Equity Line of Credit

A home equity line of credit, HELOC for short, is a revolving line of credit that functions similarly to a credit card. You can take out different amounts of cash at various times with a home equity line of credit, which can be convenient for those who don’t know how much money they might need or when they’ll need it.

Fixed-Rate Home Equity Line of Credit

If you decide to convert any or all of the money you borrowed from a home equity line of credit to a fixed rate, that’s what you call a fixed-rate HELOC. The borrower will then pay off the mortgage over a certain period of time. Make sure to do your homework on this option because rules about how you can use it may vary per lender.


Understanding how you can borrow against your home equity can be beneficial when you want to refinance or need funds for large expenditures.

If you’re ready to borrow against your home equity, contact loan our officers at Rancho Vista Mortgage to start the application process.

* Specific loan program availability and requirements may vary. Please get in touch with the mortgage advisor for more information.