Home buyers pay for the coverage in monthly installments. PMI is usually terminated when the home buyer has built up 20 percent equity in the property. Refinancing Securing a new loan in order to pay off the existing mortgage or to gain access to the existing home equity . In a home equity line of credit , that portion of the life of the loan that follows the draw period . During the repayment period, the borrower cannot take out any more money, but must pay down the loan.
Reverse mortgage See home equity conversion mortgage .
An agreement to lend a specific amount to a borrower, and to allow that amount to be borrowed again once it has been repaid. A home equity line of credit is a type of revolving credit. A refinancing loan that rolls any closing costs or fees into the loan. These programs best serve people who have a reasonable amount of home equity , want to reduce their overall interest expense, and plan to stay in their homes. Most refinance programs also cap the allowable LTV at 97 percent, which means some borrowers won't have the option of rolling their costs in no matter what.