How to Use the Equity in Your Home or Business Today to Invest for Tomorrow

fixed-rate mortgage to a 30-year fixed-rate mortgage, you can use an amortization schedule calculator to find the result. Using the amortization calculator on BankRate.com (www.bankrate.com/calculators/mortgages/amortization-calculator.aspx), you would end up paying a total amount of interest of $209,263.35 at the end of a 30-year loan, while you would pay total interest of $92,683.63 at the end of a 15-year loan. You would save over $116,000 by having a 15-year mortgage rather than a 30-year mortgage ($209,263.35 - $92.683.63 =

Two of the main factors that play a role in the decision are what you are going to use the funds for and how you need to access the funds. When you have an immediate need for the funds, then it is typically better to use a home equity loan. With a home equity loan, there are closing costs involved in establishing it, and you receive the equity monies in a lump sum payment, but the interest rate is typically lower (1 to 2 percentage points) than a home equity line of credit.

more equity you have invested in the property. Is it always wise to put more money down and finance less to purchase or refinance a property, or is it better to use this cash for other purposes? It depends.
Every financial situation is different. You have to take a long, hard look at all of your options and then educate yourself on the options available.

value ratios than commercial properties that are leased or rented to other businesses or business owners, which means that the lender will finance a higher amount on owner-occupied properties versus rented or leased properties. This also means that owner-occupied units may start off with less equity than a leased commercial property because the lender requires less of a down payment.
It is important to remember that the more money you put down a property as a cash down payment, the

property rates and terms. Because investment properties require more of a cash down payment, this means that your equity builds in the property faster than a residential property that does not require as much of a down payment.
There is also a distinction between owner-occupied commercial properties and commercial properties that are rented out or leased to tenants. Owner-occupied commercial properties are owned and occupied by the business or business owner; they have higher loan-to-

primary residence or vacation home, it is considered an investment property.
Investment properties are similar to commercial properties when it comes to the fact that lenders view them as riskier investments. This causes lenders to require larger down payments on investment properties than they do for primary or vacation homes. Lenders also charge a higher interest rate for financing investment properties. The rates and terms for residential investment properties are more attractive than commercial

the property, how the equity builds in the property, and how you can access the equity. Lenders across the United States consider an investment property as a property that is not your primary residence or second home; it is a property that is zoned residentially and contains one to four units that you lease to tenants. This means you may own a single-family home, a duplex, or three- or four-unit homes, where all of the units are rented out or available to be rented out to tenants. Even if you own these properties and they are not rented out, if it is not your

start, before taking into account any additional principal reduction payments or market value increases.
Investment vs. Commercial Properties
Newer real estate investors often confuse the terms investment property and commercial property. They think of an investment as anything they invest their money in to obtain a return on their investment, no matter how the property is zoned. Though buying a commercial property (or any real estate) can be seen as an investment, there is a difference in how the lender views

amount of mortgage you can qualify for, which in turn affects the amount of equity in your property. The lower the amount of financing, the more money that is required in cash as a down payment. The higher the cash down payment, the higher the amount of equity built into the property. This is an indirect effect on the amount of equity because the lower the amount of financing you qualify for, the more of a down payment you will be required to put down. The higher your down payment, the more equity you have in the property right from the

related to your credit history, so if your credit history is good, then your score will be higher; if your credit score is below par, your score will be lower. Lenders will pull both your credit report and your credit score from each of the three credit reporting agencies to use for making a lending decision.
While the qualification process for commercial property financing does not have a direct effect on the equity in a commercial property, it does have an indirect effect because cash flow can be a determining factor in the