With the recent real estate boom, you may be thinking about using an equity mortgage from your primary residence to purchase additional properties. A loan based on your home can be less costly and more beneficial for you. First, you need to assess if there is enough equity in your home to warrant going the equity mortgage route.

Interest rates for an equity mortgage are usually lower for your primary home than the rates on a traditional mortgage for a second property. You may be able to take out a larger equity loan without increasing your payment because of this interest rate savings. Some brokers suggest refinancing to use your home’s equity to the fullest extent, but even taking an equity loan that allows you to use up to 125% of your home’s value can give you the cash for buying a second property. If you are thinking about purchasing or building a second property, an equity mortgage may be just right for you. Be sure to research all options so that you can make an informed decision that is best for you.