American Mortgage Resource, Inc.

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Tag: Home Equity

How to Tap Into Your Home Equity

Are you feeling strapped for cash and unable to expense the high priority responsibilities in your life? In this month’s blog, we outline several convenient and accessible remedies for this common concern and how homeowners can determine which option is best for them based upon their individual circumstances.  

Home Equity Loan

A home equity loan, also called a second mortgage, is a fixed or adjustable rate loan that is secured by the equity in your home. With a home equity loan you borrow a lump sum of money to be paid back monthly over a set time frame, much like your first mortgage. The process for a home equity loan is similar to a first mortgage except the closing costs are usually lower and, although the interest rate is higher on a home equity loan, the interest paid is tax deductible.


Refinancing is the replacement of an existing debt obligation with another debt obligation under different terms. With interest rates as low as they currently are, refinancing today can grant homeowners the opportunity to lower their monthly mortgage payment more than they could’ve imagined possible. When refinancing it’s crucial to lock in a low, fixed-rate loan rather than an adjustable rate loan to ensure the monthly payment will not increase over time.   

Home Equity Line of Credit (HELOC)

A home equity line of credit is a line of credit backed by the equity of the home and gives homeowners a revolving credit line for that amount.  With these loans you only have to pay interest on the money you actually withdraw, but should feel confident in being able to repay that entire balance by the time the repayment period expires as per the terms.

Which Option is Best for You?

Determining the best way to tap into your home equity depends mostly on what you want to do with the money. If you’re needing to pay off a major expense all at once such as a debt consolidation, college, or medical bills, then a home equity loan is most likely your best option. To qualify for this typically your credit must be in good standing, you must be able to document your income, and you will need to have your home appraised to determine its current market value.

Refinancing is optimal for those who have at least 20% equity in their home and are seeking lower monthly payments or shorter loan terms. The best time to refinance is when interest rates drop, credit scores improve, or when annual income significantly increases.

Those looking to use their equity to expense a prolonged activity such as a major home renovation or building a business will need cash more sporadically, meaning a HELOC would be most suitable. These loans can be very cost efficient as they have lower interest rates and are free of closing costs. HELOCs are typically granted to those who have at least 15%-20% equity in their home, are in good credit standing, and have a low debt-to-income ratio.

Final Thoughts

Tapping into your home’s equity can be confusing and tough to navigate, but with help from the right lenders can be the most rewarding and money savvy decision you’ve ever made! American Mortgage Resource is recognized as one of the top brokers in Massachusetts, with reliability and professionalism at the forefront of their values. Visit our website or contact the team directly at (617) 972-8588 to discover the best way for you to finally tap into your homes equity for good!

The Best Ways to Use a Home Equity Loan

What are you envisioning for your home? Are you looking to renovate the kitchen? Perhaps replace the garage door? To fund your house projects, you can find financial support through a home equity loan. Bankrate comments, “Tapping your home equity can be a convenient, low-cost way to borrow large sums at favorable interest rates in order to pay for home repairs or debt consolidation.” Continue reading to learn about more ways you can use your home equity loan.

Home Improvements

Financing large projects is feasible with a home equity loan. With fixed monthly payments and a large sum of cash up front, you can pay for projects like a kitchen remodel, bathroom renovation, deck installation, and more. Once these projects are finished, they can raise your home value over time and give you a good return on your investment. Are you planning to sell your home in the future? Prospective buyers will take an interest in your new improvements.

College Debt

While student loans are more conventional, another route you can take is by using home equity. You may find that a home equity loan gives you more of an advantage due to the lower interest rates. Additionally, you can extend the term of the loan and therefore reduce your payments. However, you want to be careful not to default payments, otherwise, you could lose your house. Before using home equity for student debt, calculate the monthly costs and see if you can make the payments.

Debt Consolidation

Are you paying high-interest debt on a credit card or car loan? Consider consolidating your debt with your home’s equity. This way, you can pay off personal debt at a lower interest rate and set a longer term. You will be able to make monthly payments quicker and easier. Note: using home equity makes this secured debt – meaning the collateral is your home. Bankrate states, “If you have a solid debt payoff plan, using home equity to refinance high-interest debt can help you get out of debt faster.”


When you need a home equity loan, contact the team at American Mortgage Resource, Inc. Our professional lenders have the answers to your loan questions and are friendly when helping you with your loan needs. Get started on the loan application process today!

Home Equity Loans: The Answer You’ve Been Looking For

Qualifying for certain loans and credit cards can be a difficult and confusing process for many of us. Homeowners have a unique advantage when it comes to borrowing money in a pinch as they may be able to qualify for a home equity loan. Follow along below as we discuss home equity loans and their pros and cons.

What’s a Home Equity Loan?

A home equity loan is a fixed or adjustable form of credit secured by how much equity you have in your home and enables you to borrow against that equity. Essentially this type of loan is a second mortgage as you will have to continue paying your primary mortgage while simultaneously making payments on your new home equity loan.


Home equity loans can save the day when you need help repaying higher interest debt elsewhere or funding home renovations. A distinctive benefit these loans offer is that while their interest rates may be slightly higher, any interest paid on them is tax deductible.


Undoubtedly the biggest risk in taking out a home equity loan is that your lender may be able to force you to sell your home to resolve the loan if you are ever unable to make your payments. Additionally, your home will have to be appraised to establish its value and you will have to provide proof of sufficient credit and income.

Final Thoughts

When considering applying for a home equity loan or any other type of loan, be sure to shop around to compare the varying plans offered by banks, credit unions, and mortgage companies in your area. At American Mortgage Resource, Inc. we have relationships with over 20 different lenders and strive to make the process as simple and smooth as possible. Contact us here to learn more about our affordable services.

Reverse Mortgages 101

The word “mortgage” usually brings to mind years of payments to a financial institution, until the full payment is accomplished. However, not all mortgages operate the same way. Hence, this blogpost welcomes the reader into the world of reverse mortgage.

Has to do with home equity

Also known as home equity conversion loans, reverse mortgages indeed are determined by the value of home equity. Reverse mortgages are available for homeowners 62 and older. To take out a reverse mortgage, a homeowner borrows against his or her home equity—i.e. based on the value of the home. Reverse mortgages are great in that they can allow homeowners to take advantage of a lump sum by borrowing against the equity (which can be a source of immediate income when times are tough or a steady stream of income). Although the homeowner is not required to make monthly mortgage payments, the full repayment is achieved at loan maturity.

A picture of home equity.

When is loan maturity achieved?

Loan maturity can occur when the homeowner sells the title of his or her home or moves out of the home (for example, to move into his or her child’s home). Unless the homeowner repays the mortgage by selling the home—the net amount from which would be used for repaying the mortgage loan—the homeowner’s heir(s) must repay the mortgage. Loan maturity can also occur when the homeowner dies. Creditors have the motivation to not collect monthly payments since the loan balance increases.

An elderly woman dabs.


When one only has the facts above, a reverse mortgage could sound too good to be true. However, paying homeowner’s insurance and property taxes are still requirements for a reverse mortgage. (This is why wise financial planning is crucial for avoiding foreclosure.) Moreover, in certain instances, a widow or a widower can lose a home; therefore, reading the fine print is key for benefiting from a reverse mortgage. Another major caveat is that many scammers target the elderly in exchange for a fake reverse mortgage.

An elderly couple talks to a mortgage lender.


So there you have it. Reverse mortgages can be tricky to navigate, which is why you need a professional on your side. To benefit as much as you can from this “home equity conversion loan,” simply enlist the help of American Mortgage Resource, Inc. today.