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Your home equity may be up, here's how to use it


Jan 19, 2023



The holiday season is right around the corner. Need cash for the big end-of-year holidays, like Christmas or Hanukkah? Great timing — because your home equity is likely up due to the surrounding housing market conditions. 

Here’s a state of the union on home equity at the end of 2022, and how you can take advantage of your home equity by leveraging a home equity line of credit (HELOC). 

Why Is Equity on the Rise? 

If you’ve been keeping an eye on the housing market for the past few years, you’ve probably seen that real estate prices are skyrocketing. 

Due to the disruption of real estate sales cycles during the pandemic, the U.S. housing market experienced a surge of buyer demand when the market’s reopened back in 2021. This demand outpaced the supply, as the national housing market is experiencing a long-term inventory shortage

All of these factors combined created an environment that drove up home prices. 

In June of 2022, the national median listing price soared to $413,000 — a new all-time high, according to the National Association of REALTORS®. Today, real estate prices remain high. In August 2022, the median sales price for homes in the United States was $389,500. This is 7.7% higher than prices one year ago. 

These factors are driving up homeowner equity all across the country. Rising home prices positively impact equity, while dropping home prices have a negative effect on equity. 

Let’s say that you purchase a home for $250,000, and the home’s fair market value increases to $325,000. Due to the rise in value, your home equity will increase, too — in this example, raising your equity by $75,000. 

Of course, the actual number of accessible equity you have available will depend on your mortgage balance. However, the current real estate market conditions are a good sign that your equity may be up.

How to Know Where Your Equity Is At? 

With home prices rising at a rapid pace, your home equity may have been positively impacted by the market conditions. If you’re a homeowner wondering if your equity is up, how can you track it? 

You can use a trustworthy and reliable online home equity calculator, such as the Hitch Equity Calculator. Simply select the state you live in, type in your estimated home value, and submit your estimated mortgage loan balance. 

This will give you an idea of how much equity you have built up in your home. To discuss exact numbers, we recommend that you speak to the Hitch team to ask specific questions about your equity. 

Put Your Equity to Work via a HELOC

So, you’ve found out that your equity is up — but now what? How do you access, use, and leverage your home equity? 

The best way to put your home equity to work for you is by taking out a home equity line of credit, commonly known as a HELOC. 

A HELOC is a home loan that homeowners can take out as a second mortgage that uses their home equity as collateral for a revolving credit line. Since your home equity is backing the loan, borrowing qualifications are boosted — giving you access to favorable terms and conditions, such as reduced interest rates, affordable monthly payments, and waived fees. 

As with any loan, if you’re applying with strong credit and meet all qualifying criteria, you may be able to land an amazing offer on your HELOC — accessing even lower interest than is average for this loan type. 

When you take out a HELOC, you can access a loan amount equal to your total accumulated equity. 

Your loan amount is your available cash fund, which can be accessed during the “draw phase” of your HELOC. During this time, you can access your HELOC funds as cash. 

The money you take out of your HELOC becomes your principal balance. During the draw phase, you can make the minimum monthly payments or choose to only pay the interest charges. 

The next phase of a HELOC is the “repayment phase,” when you can no longer extract funds from your HELOC and must pay back the full monthly payment amounts of both principal and interest. 

Since different HELOC offerings introduce different procedures, your situation may vary slightly. However, this is an overview of the general mechanics of how a HELOC turns your equity into cash you can access. 

Explore a Frictionless HELOC with Hitch 

If you’re interested in tapping into your equity, explore a frictionless HELOC with Hitch

When you take out a HELOC with Hitch, you can get quick access to your home equity. With Hitch’s innovative fully-digital process, there are no long wait times or strict requirements to apply with a perfect credit score. 

With Hitch, you can borrow up to 90% of your home’s value minus your current mortgage balance at rates starting as low as 7.950% variable APR. Hitch offers the option to make interest-only payments for a decade, helping you manage reduced monthly expenses. 

Applying is quick, easy, and fully online. It will take only a few minutes. What are you waiting for? Click here to see your rate with Hitch.

Borrow from yourself, not the bank!

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Equal Housing Lender

Hitch, Inc. NMLS #2383367 #2383367

2158 NW Toussaint Drive. Bend, Oregon 97703

1. Qualified applicants may borrow up to 95% of their home’s value. This does not apply to investment properties.

2. HELOCs have a 10-year draw period. During the draw period, the borrower is required to make monthly minimum payments, which will equal the greater of (a) $100; or (b) the total of all accrued finance charges and other charges for the monthly billing cycle. During the draw period, the monthly minimum payments may not reduce the outstanding principal balance. During the repayment period, the borrower is required to make monthly minimum payments, which will equal the greater of (a) $100; or (b) 1/240th of the outstanding balance at the end of the draw period, plus all accrued finance charges and other fees, charges, and costs.The lender will calculate this amount by taking the outstanding Account Balance on the last day of the draw period and dividing it by 240 months and then adding any finance charge that accrues but remains unpaid during the monthly billing cycle plus any other fees, charges and costs to the fixed principal payment that is due. During the repayment period, the monthly minimum payments may not, to the extent permitted by law, fully repay the principal balance outstanding on the HELOC. At the end of the repayment period, the borrower must pay any remaining outstanding balance in one full payment.

3. The time it takes to get cash is measured from the time the Lending Partner receives all documents requested from the applicant and assumes the applicant’s stated income, property and title information provided in the loan application matches the requested documents and any supporting information. Most borrowers get their cash on average in 21 days. The time period calculation to get cash is based on the first 4 months of 2024 loan funding's, assumes the funds are wired, excludes weekends, and excludes the government-mandated disclosure waiting period. The amount of time it takes to get cash will vary depending on the applicant’s respective financial circumstances and the Lending Partner’s current volume of applications. Closing costs can vary from 3.0 - 5.0%. An appraisal may be required to be completed on the property in some instances.

4. Not all borrowers will meet the requirements necessary to qualify. Rates and terms are subject to change based on market conditions and borrower eligibility. This offer is subject to verification of borrower qualifications, property evaluations, income verification and credit approval. This is not a commitment to lend.

5. The content provided is presented for information purposes only. This is not a commitment to lend or extend credit. Information and/or dates are subject to change without notice. All loans are subject to credit approval. Other restrictions may apply.