How to Tap Into Your Home Equity the Smart Way (Without Costly Mistakes)!

by Bret Johnson

What Could You Do with an Extra $50,000 or More?

If you’ve owned your home for a few years, you could be sitting on a goldmine of home equity. But here’s the kicker—most homeowners either don’t know how to access it or make costly mistakes when they do!

In this guide, I’ll break down the smartest ways to unlock your home equity while avoiding the pitfalls that could cost you thousands.

What Is Home Equity?

Let’s start with the basics. Home equity is the difference between your home's worth and the amount you still owe on it.

For example:

If your home is worth $500,000 and you owe $300,000, you have $200,000 in home equity.
As home values increase (which they have dramatically in Arizona), so does your equity.

Now, the big question—how do you access that equity in a way that makes sense for you? Let’s break it down.

Option 1: Sell Your Home and Cash Out

One of the simplest ways to unlock your equity is by selling your home and pocketing the profits.

✅ Best for:

Homeowners who are ready to downsize, relocate, or cash in while home prices are high.

⚠ Things to consider:

You’ll need to plan your next move—whether that’s buying another home, renting, or investing.
Selling involves closing costs, real estate commissions, and potential moving expenses.

Pro Tip: If you’re considering selling, I can provide a free home equity assessment to estimate how much cash you’d walk away with after a sale.

Option 2: Home Equity Loan or HELOC

If you’re not ready to sell but need access to cash, a home equity loan or home equity line of credit (HELOC) could be a great option.

What’s the Difference?

A home equity loan gives you a lump sum of money upfront, with a fixed interest rate and predictable payments.
A HELOC works like a credit card—you can borrow as needed, but the interest rate may fluctuate.

✅ Best for:

Home improvements, debt consolidation, or major expenses.
Homeowner who want to keep their home but need access to funds.

⚠ Things to consider:

You’re taking on more debt, and if interest rates rise, payments could increase (especially with a HELOC).
Defaulting on payments could put your home at risk.

Pro Tip: Use a HELOC strategically for projects that increase your home’s value, like renovations, rather than spending on depreciating assets.

Option 3: Cash-Out Refinance

A cash-out refinance replaces your existing mortgage with a new, larger loan, and you receive the difference in cash.

✅ Best for:

Homeowners who want to refinance at a lower interest rate while pulling out some cash.
Those planning to stay in their home long-term and use the equity to invest elsewhere or consolidate debt.

⚠ Things to consider:

If today’s interest rates are higher than your current mortgage rate, a refinance may not be the best move.
Closing costs and fees apply, so run the numbers before deciding.

Pro Tip: If you refinanced when rates were at historic lows, a HELOC may be a better option than refinancing at a higher rate.

Which Option Is Right for You?

Before making a decision, ask yourself:
✅ Do I plan to move soon, or do I want to stay in my home?
✅ Do I need a lump sum of cash now, or do I want a flexible credit line?
✅ How will this decision impact my long-term financial goals?

Still unsure? That’s where I come in.

I offer a free, no-pressure home equity assessment to help you: