7 Brilliant Strategies for Squeezing Equity Out of Your Home (Without Refinancing)

If you need cash for a big project and are a homeowner, tapping into your home equity might be one of the first routes you consider. Historically, many people who leverage their home equity do so through a cash-out refinance.

But that's not your only option. There are other smart homeowner moves that you can use to tap your home equity.

Here are seven strategies you can use to get equity out of a home without refinancing.

With a home equity loan, you can pull out a lump sum from the equity you have in a home. However, this type of loan comes with several stipulations.

You typically need to have between 15% and 20% equity in the home, a debt-to-income ratio of 43% or less, and a solid credit score of at least 620. 

If you meet these requirements and land a home equity loan, be prepared to have a new payment with a fixed-rate interest rate on top of your current mortgage.

A home equity line of credit (HELOC) is similar to a credit card. With both, you have a credit limit that you can borrow against again and again. Each time you borrow, you simply pay back the money.

HELOCs typically have significantly lower interest rates than credit cards. During the “draw period,” the borrower is required to make payments only on the interest. Once the draw period is over—usually after about 10 years—the principal repayment period begins.

With a HELOC, you will face closing costs. These can vary depending on your state’s laws, the loan amount, and the lender.

Requirements for getting a HELOC are similar to those needed for a home equity loan, and your HELOC payment will be in addition to your regular mortgage payment.

A reverse mortgage is a way to get cash out of your home. Payments can be made monthly, in a lump sum, or via a line of credit. Requirements often are lower than those needed for a home equity loan or a HELOC.

Reverse mortgages are geared toward retirees who are cash poor but have significant equity in their home — typically over 50%. You must be at least 62 to qualify.

Often, reverse mortgages do not need to be paid back until the homeowner dies, the house is sold, or the homeowner moves elsewhere and has not lived in the home for at least a year.

A sales-leaseback agreement is just what it sounds like: a homeowner sells their home, receives the equity they have built up, and then continues to lease the home and live in it.

This might be a good option for homeowners who want the freedom to use their home equity in other ways, but it can come with some downsides. 

Depending on the terms, the now-former homeowner may still be responsible for maintaining and repairing the property, as well as paying property taxes.

If you have good credit but low equity in your home, a secured loan can be among the fastest and easiest ways to access equity.

Your property deed or the fixtures within your home secure the loan, and you can pull out money at a low fixed interest rate. 

Typically, these loans are available on a shorter term than you would get with a home equity loan or a HELOC, which means you pay less interest over the life of the loan.

With a home equity agreement — also known as a home equity investment (HEI) — an investor buys a minority stake in your home. They have no rights as a property owner, but they are betting on your property value to grow, and their stake to grow along with it.

The investor’s share is typically 15% to 30% of the equity available in the home, and the homeowner receives cash up front that equals that stake.

At the end of the contract or when the home sells, the homeowner pays out the percentage to the investor. Typically, this works out in favor of the investor.

You can also get cash out of your home by using your home’s deed as collateral to secure a personal loan.

Typically, these loans have fixed rates, and you can use the cash however you see fit. The interest rate will not be as low as with other options, but a personal loan does allow quick access to cash.

Pulling equity out of your home for a major renovation or another high-ticket life milestone carries certain risks. But it can also eliminate some money stress for those who want to avoid resorting to draining their savings.

If tapping your equity seems like the best solution for you, explore the options on this list and see if one is right for you.