Cash-out refinancing and HELOCs surge. Are they a fit for you?
March 22, 2022
Skyrocketing home values in 2021 mean that homeowners across the United States gained new wealth through their properties, with an average increase in equity of nearly $57,000 per mortgage borrower from the third quarter of 2020 to the third quarter of 2021, according to property data analytics firm CoreLogic.
As a result of increased home values, lenders and real estate data analysts say that cash-out refinancing, which allows borrowers to take out some of their home equity with a new mortgage, increased in 2021. That growth is anticipated to continue in 2022.
One option for some of these borrowers is a shared equity arrangement from companies such as Hometap, Unison and Unlock. Unlike a cash-out refinance or a home equity line of credit, a home equity share agreement allows homeowners to take out cash from their home equity without payments or interest accruing. In exchange, the investor will be repaid with a portion of the home’s equity when the homeowners sell, buy out the investor or the agreement ends.
This article originally appeared on the Washington Post. Read the article here.