NEW YORK, January 31, 2023 (Newswire.com) - Sponsored Content: Your home has value, but it can be hard to access that money when you need it. Luckily, borrowing against the ownership in your home might be easy. 

How Much Equity Do I Have? 

As a homeowner, whether you've just made the down-payment or have been free of your mortgage for years, you own some percentage of your home. The goal of paying off your mortgage is to own 100% of the value of your house by the term's end. By no means, though, do you need even close to 100% equity ownership in your home to use it as collateral. 

Home Equity Loans 

Home equity loans are one-time, lump-sum secured loans also known as second mortgages. These loans allow you to access the equity you already have in your home through a cash payment, which is repaid in low-interest installments over a fixed term. Home equity loan rates from lenders like Discover® Home Loans tend to be substantially lower than interest rates for personal loans. 

Cash-Out Refinancing 

Cash-out refinancing means replacing your mortgage with a new mortgage, with some of your equity withdrawn as cash in the process. 

You might consider a cash-out refinance from Discover or another home lender to consolidate debt from one or more sources, to pay lower interest rates and/or lower monthly payments, or even to increase monthly payments to pay down your mortgage faster. 

Home Equity Line of Credit (HELOC) 

HELOCs are secured lines of credit that provide homeowners access to funds up to a predetermined limit, during what is known as a "draw" period. These funds can be deposited into your account by wire or may have specialized checks and credit cards associated with them. HELOCs require you to make small interest payments during the draw period, which usually lasts up to 10 years. 

Once this draw period closes, a longer "repayment" period begins, usually lasting up to 20 years and traditionally set with variable interest rates—though fixed interest rates are becoming a more popular option. During this time, you can no longer access the line of credit, and will have to start paying off the debt balance plus any interest gained.