Homeownership offers many perks, but the greatest may be the opportunity to build wealth. As you pay down your mortgage, you build equity — the dollar amount of your home that you own. Fluctuations in the housing market influence equity, too (for better or worse), and if house prices rise, your home equity can increase, and vice versa. Home equity has been way up over the past year: In fact, homeowners in the U.S. gained $1 trillion in home equity during the fourth quarter of 2022, according to a recent report from real estate data service CoreLogic.
With enough home equity, you can borrow using your house as collateral. One option is a home equity loan, where you borrow a lump sum that you repay over a set term. If you could use cash for home improvements, debt consolidation, or other expenses, here’s how to get a home equity loan in 2023.