Equity Take Out

An equity take-out mortgage is a mortgage loan used to “take out” equity for other purposes. It may be used for repairs or renovations of the property, to use as a down payment for a vacation property, for investment in another area, or for many other purposes. Because it is tied to property equity, the property owner must have equity in the property, after its fair market value and other mortgages are taken into consideration.

An equity take-out mortgage may contain a fixed rate and a fixed sum borrowed, or maybe a variable rate and may be arranged as a line of credit, where funds are withdrawn at the discretion of the borrower. Since this is one of the secured loans, it gives you the advantage of the best possible interest rates.