Using your home equity: understand the options before you borrow
Home equity is the difference between what your home is worth and what you still owe on it. Homeowners sometimes borrow against that equity to pay for a renovation, consolidate higher-cost debt, cover education costs, or handle another major expense. Because the home secures the debt, it is worth understanding how each option works, and what to ask, before you decide.
AMC is a mortgage broker, not a lender. We help you compare and arrange HELOCs and fixed-rate home equity loans through our lending partners, for owner-occupied and investment properties.
Only offered in Florida & Texas.
AMC’s lending partners offer options for a wide range of credit profiles. All loans are subject to lender approval; not all applicants will qualify.
HELOC vs. home equity loan vs. cash-out refinance
Home equity line of credit (HELOC). A HELOC is a revolving line of credit secured by your home. You may be able to draw funds as needed during a draw period and then repay during a repayment period. Many HELOCs have variable rates, so payments can change. Ask about minimum payments during and after the draw period, and any fees for opening, using or closing the line.
Fixed-rate home equity loan. A home equity loan generally provides a lump sum, repaid over a set term at a fixed rate, and is usually a second mortgage alongside your existing first mortgage. Ask what the total cost is over the life of the loan.
Cash-out refinance. This replaces your current mortgage with a new, larger one and may provide cash from available equity, subject to program rules. It changes the terms of your primary mortgage, so compare it with keeping your current loan in place and adding a second lien instead. Cash-out refinancing is covered on our Refinance page, including how it works and what to compare.
Begin with how you plan to use the money
A single, known expense. If you need a set amount once — for example, to fund a renovation with a fixed bid — a lump-sum home equity loan may be worth discussing.
Ongoing or uncertain costs. If expenses will come in stages, a HELOC that lets you draw funds as needed may be worth comparing.
Replacing your current mortgage at the same time. If you also want to change your first mortgage’s term or structure, a cash-out refinance may be another path worth reviewing.
Owner-occupied and investment properties
AMC can help arrange equity options for both owner-occupied homes and investment properties, though requirements, documentation and available terms generally differ by occupancy type and are set by the lending partner. If you’re considering equity on a rental or investment property, our Investors page covers financing considerations for investment property owners more broadly.
What to compare before you decide
- How much equity may be available after existing liens and costs
- Whether the rate is fixed or variable, and how a variable rate can change
- The APR, and all fees: appraisal, origination, annual, early-closure or draw fees
- How payments work now and later (for a HELOC, during and after the draw period)
- How the new debt fits with your current first mortgage
- What happens if your home’s value falls or your income changes
- Alternatives such as savings, a smaller amount, or a different type of financing
Ask for written terms and compare them side by side. For a closed-end home equity loan or a cash-out refinance, you’ll generally receive a Loan Estimate. HELOCs come with their own required disclosures. The CFPB’s guide to home equity lines of credit is a useful plain-language starting point.
Frequently asked questions
Is a home equity loan the same as a HELOC?
No. A home equity loan usually provides a single lump sum repaid on a set schedule at a fixed rate. A HELOC is a revolving line you can draw from over time, often with a variable rate. Which one fits depends on how and when you need the funds.
Do I have to refinance my mortgage to use my equity?
No. A home equity loan or HELOC is typically added alongside your existing mortgage, while a cash-out refinance replaces it. Compare refinance options against keeping your current mortgage in place with a second lien.
How much can I borrow?
It depends on the property’s value, what you owe, the lending partner’s program rules, and your financial situation. A loan specialist can explain which factors apply. Any amount is determined only after a full application and review.
What are the risks?
Your home secures the debt. If you can’t repay, you could lose your home. Using equity to pay off other debts doesn’t erase them — it converts them into debt secured by your home. Variable-rate lines can also become more expensive over time.
Is the interest tax-deductible?
It may be in some circumstances, depending on how the funds are used and current tax law. AMC doesn’t give tax advice. Ask a tax professional about your situation.
Can I use equity in an investment property?
In some cases. Requirements and available terms differ from an owner-occupied home and are set by the lending partner. See Investors for more on financing investment properties.
Which states are these programs available in?
Florida and Texas only.
What credit profile do I need?
AMC’s lending partners offer options for a wide range of credit profiles. All loans are subject to lender approval; not all applicants will qualify.
Does AMC lend the money directly?
No. AMC is a mortgage broker, not a lender. We arrange financing through our lending partners and do not fund loans ourselves.
Talk through your equity options
Tell us what you’re planning and roughly when you’ll need the funds. A first conversation can help you understand which questions to ask next. It isn’t a loan application, approval, or commitment.
Only offered in Florida & Texas.
This page is educational and does not determine whether a loan is available or suitable for you. AMC is a mortgage broker, not a lender, and does not fund loans. Availability, terms and eligibility vary and are set by the lending partner. All loans are subject to lender approval; not all applicants will qualify. American Mortgage Corporation, NMLS Consumer Access #: 1203481.