If you bought a house in the 1990s or early 2000s, your home’s value has likely increased significantly over the past two decades. According to Realtor.com, home prices have risen by an average of 90% since 2005.
In reality, homeowners who’ve owned their properties for 10-30 years may now hold a valuable asset worth hundreds of thousands more than they initially paid. For instance, someone who bought a house in 2005 for $229,000 could now borrow up to $40,000 more with a home equity loan or line of credit.
Homeowners can tap into their home equity using various options like a home equity loan (disbursed in one lump sum) or a home equity line of credit (with usage periods). A cash-out refinance replaces your current mortgage, allowing you to pocket up to 80% of the remaining value. Alternatively, home equity investment agreements provide access to funds by signing over a portion of your home’s current and future value.
Note: Simplified text for easier understanding, focusing on key points about exponential value gain and home equity options.
Source: https://www.cnbc.com/select/tapping-home-equity-growth