Your property’s equity or current market value, less any debt still owed on the mortgage, increases your net worth. You must understand what lenders are looking for when borrowing to purchase an investment property, such as bearing gifts for use as your downpayment, making your available equity to invest a much more valuable resource.
Using debt to expand your potential or leveraging your real estate holdings, you can withdraw this equity to invest in real estate to build wealth and increase your monthly cash flow.
For example, if your home is worth $400,000 and you have a debt of $200,000, there is $200,000 available for investing in real estate. You gain net worth through appreciation on your investment properties as your monthly cash flow improves.
Savvy investors know that by repeating this process, you can build a solid portfolio to provide financial security throughout your golden years. In addition, through careful planning and due diligence, you can build a portfolio that will hold long-term value when you have equity and a golden retirement to look forward to through well-managed real estate investments. So read on as we explore how to use your equity to invest in Raleigh, Durham, Clayton, Smithfield, Rocky Mount, Selma, Wilson, Goldsboro, Kinston real estate. Please note that this article is for informational purposes, not financial or legal advice.
HELOC
A home equity line of credit is a revolving line of credit. You can borrow up to 80% of the home’s value.
Here’s how a HELOC works:
- The lender determines the value of the home: To determine how much you can borrow, the lender will assess the value of your home through an appraisal.
- The lender determines the maximum loan amount: The maximum loan amount is typically a percentage of the home’s appraised value, with 80% being a common limit.
- The borrower can access funds as needed: With a HELOC, the borrower can access funds as needed, up to the maximum loan amount. This is similar to a credit card, where the borrower can borrow and repay funds on an ongoing basis.
- Interest is only charged on the amount borrowed: Unlike a traditional loan, where interest is charged on the entire amount of the loan, interest on a HELOC is only charged on the amount that is borrowed.
- Repayment terms vary: Repayment terms for a HELOC vary depending on the lender and the borrower’s needs. Some HELOCs require monthly payments, while others allow for interest-only payments or balloon payments.
It’s important to keep in mind that a HELOC is a form of debt that is secured by your home. It’s super important to carefully consider the risks and benefits before taking out a HELOC to invest in real estate.
Professional investors at NC TLC Estate work with a full-service in-house team of industry specialists saving investors like you time and money through internal efficiency. The professional investors at NC TLC Estate and their team quickly jump into action.
At NC TLC Estate, we handle deals from the inspection to the closing table and property management. When you have equity to invest, working with NC TLC Estate makes investing in Raleigh, Durham, Clayton, Smithfield, Rocky Mount, Selma, Wilson, Goldsboro, Kinston real estate easy.
Home Equity Loan
A home equity loan is typically a fixed-rate loan of between five to 30 years which is paid to you in one lump sum, enabling you to use your equity to invest in Raleigh, Durham, Clayton, Smithfield, Rocky Mount, Selma, Wilson, Goldsboro, Kinston real estate.
Here’s how a home equity loan works:
- The lender determines the value of the home: To determine how much you can borrow, the lender will assess the value of your home through an appraisal.
- The lender approves the loan: If you are approved for a home equity loan, you will receive the funds in one lump sum.
- You make fixed payments: With a home equity loan, you will make fixed payments over the life of the loan, which is typically between five to 30 years.
- Interest is charged on the entire loan amount: Unlike a HELOC, where interest is only charged on the amount borrowed, interest on a home equity loan is charged on the entire loan amount.
- Your home is used as collateral: Like a HELOC, a home equity loan is a form of debt that is secured by your home. This means that if you are unable to repay the loan, the lender can foreclose on your home.
It’s important to carefully consider the risks and benefits of taking out a home equity loan to invest in real estate in Raleigh, Durham, Clayton, Smithfield, Rocky Mount, Selma, Wilson, Goldsboro, Kinston.
While a home equity loan can provide access to additional funds for investing, it also comes with the risk of losing your home if you are unable to repay the loan. Additionally, it’s important to ensure that the potential returns from your real estate investment are worth the cost of the loan, including the interest payments and any associated fees.
Professional investors like those at NC TLC Estate know the red flags and can help you avoid unnecessary and costly mistakes. The professional investors at NC TLC Estate can help you see green flags instead when you have equity to invest.
Refinance
Refinancing, or acquiring a new loan for a greater amount than you previously owed, is another way to use your equity to invest in Raleigh, Durham, Clayton, Smithfield, Rocky Mount, Selma, Wilson, Goldsboro, Kinston real estate. Professional investors like those at NC TLC Estate have years of experience working with investors. The professional investors at NC TLC Estate know how to knock down any hurdles that stand in your way when you have equity to invest.
NC TLC Estate
The best way to use your equity to invest in Raleigh, Durham, Clayton, Smithfield, Rocky Mount, Selma, Wilson, Goldsboro, Kinston real estate is by working with professional investors at NC TLC Estate.
Talk to one of our pros at NC TLC Estate today without any obligation about how to invest your equity.
At NC TLC Estate, we are happy to answer your questions and address any concerns about getting started, no matter what obstacles you believe may stand in the way.
And don’t forget to ask about our current inventory of the best investment properties available in Raleigh, Durham, Clayton, Smithfield, Rocky Mount, Selma, Wilson, Goldsboro, Kinston.
The professional investors at NC TLC Estate can help you run the numbers and assess properties to make the best choice and bring the highest and most secure returns on your investment dollar. At NC TLC Estate, we are passionate about helping other investors succeed because when our investors succeed, we succeed.
So, call NC TLC Estate at 919-920-7081.