Unlock Your Home’s Potential: How to Tap into Home Equity

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For many homeowners, the largest portion of their net worth is tied up in their mortgage through equity in their home. But if you need to tap into your wealth without selling your home, there are a few financial tools you can leverage with the help of a mortgage broker to access the equity you have built up.

Two of the most common financial tools homeowners use are Home Equity Lines of Credit (HELOCs) and Home Equity Loans. And while they sound similar, each of these options has unique pros and cons to help you tap into your home’s equity.

At Penn Street Mortgage, our team of mortgage brokers is here to present you with all the options, and understanding of these financial tools so you can make an informed decision that is best for you and your family. If you need the advice of a PA mortgage broker to navigate your home loan process, our team is ready to help!

Let’s dive into the entire process of home loans to access your equity.

What is home equity?

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Do you have a clear understanding of what your home equity actually is and how to calculate it? Your home equity is the difference between your home’s current market value and the mortgage you still owe on your original loan.

As you make payments towards your mortgage, the amount of equity you have in your home will increase. Plus, in most cases, real estate is an appreciating asset which means it gains value over time. If your property has greatly increased in value compared to your purchase price, you also have built equity in your property.

In other words, equity is the portion of your home that you truly own. Since you own this portion of your home, it can be tapped into when you need cash or for other purposes like home renovations, debt consolidation, or even paying for a college education.

If you are curious to take advantage of interest rates and want to explore how a refinance can benefit you, head to our mortgage calculator to see how your credit score, mortgage rates and other factors can impact your Chester County refinance.

Tap into Your Home Equity – But How?

You have equity in your home, and you want to access it. The question becomes: should you choose a Home Equity Loan or a HELOC? Let’s break down these two options.

Home Equity Loan Programs

A Home Equity Loan functions like a second mortgage. It allows you to borrow a lump sum of money based on the equity in your home, which you repay over a fixed term at a fixed interest rate.


  • The interest rate and monthly payments are fixed, which makes budgeting easier.
  • You receive the entire loan amount upfront, making it ideal for large, one-time expenses.


  • You are taking on an additional mortgage payment.
  • Your home is collateral, meaning that if you cannot repay the loan, you might lose your home.

Home Equity Line of Credit (HELOC)

A HELOC essentially provides you with a revolving line of credit, similar to a credit card. You can borrow as much as you need, up to your credit limit, during a predefined draw period.


  • It offers flexibility to borrow only what you need when you need it.
  • You only pay interest on the amount you borrow.


  • Your monthly payments can change as you borrow more or as your interest rate adjusts, which can affect budgeting.
  • Your home is at risk if you cannot make loan payments.

Refinancing Your Mortgage

Refinancing your mortgage is another option that allows you to tap into your home’s equity. With a refinance, you replace your existing mortgage with a new one that typically has a lower interest rate or more suitable terms, and in exchange, you can cash out on your original home loan.


  • Refinancing can reduce your monthly mortgage payments if you qualify for a lower rate than your current mortgage. This can also help you get rid of private mortgage insurance if you have to pay that.
  • You can opt to refinance from a longer-term mortgage to a shorter-term, which can help you save money in interest over the life of the loan.


  • Refinancing involves some of the same closing costs as a first mortgage, including application fees, appraisal costs, and origination fees.
  • Refinancing conventional loans can take longer than a HELOC or home equity loan. If you need access to cash fast, it might not be your best option.

If you are interested in refinancing your home, Penn Street Mortgage is here to help you through the mortgage process.

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The Difference Between Mortgage Lenders vs. Mortgage Brokers

If you are deciding between a mortgage lender or working with a mortgage broker for your home loans, it is important to understand the differences and benefits so you get the best mortgage experience.

A mortgage lender can only present you with home loan options from a specific bank or financial institution, which can minimize the amount of options you have to review.

However, a local mortgage broker will act as a middleman between you and different financial institutions and lenders. They can help you find the best loan option for your situation.

At Penn Street Mortgage, our brokerage firm can guide you through the home-buying experience and refinance process with excellent service and competitive rates.

Penn Street Mortgage | Your Chester County Mortgage Company

Our professional and experienced team at Penn Street Mortgage in West Chester is here to make your financial goals a reality. We are committed to guiding you through the unique mortgage process that comes with home equity products. Do not hesitate to reach out and discuss your specific situation!

We are here to make the whole process simple and stress-free! Contact us today to reach out to our extremely responsive team.

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