Can I use the equity in my home to pay off or pay most of my mortgage?

2 comments

1. 

   sharrioz says:

   October 15, 2007 at 1:21 am (UTC 0)

   NO, but you can use that equity to purchase another.

2. 

   likepepsi says:

   October 15, 2007 at 3:57 am (UTC 0)

   I assume when you say you want to lower your mortgage amount, you mean you want to lower your monthly payment.

   So the answer is possibly yes, assuming your equity is greater than your remaining mortgage balance, and your credit is good enough that you can get a home equity loan (2nd mortgage) or home equity line of credit.

   Depending on the terms of the home equity loan, you might be able to use the money from it to pay off your first mortgage and have a lower monthly payment as you repay the home equity loan. But it will depend on how much equity you have, your credit score, the interest rate, the terms of your first mortgage, and the length of the home equity loan.

   The only way your monthly payment will change is to pay your first mortgage in full. Just paying part of it will not change your monthly payment. Your monthly payment on your first mortgage stays the same until it is completely paid off.

   There are too many variables to say for sure whether it’s going to work for your specific situation, but it might be possible.