Home Equity vs. Selling Your Home

For many affluent homeowners, the residence is simultaneously the largest asset and the least liquid one. Selling is the most direct route to liquidity, but it ends ownership, triggers transaction costs and may carry tax consequences.

Accessing a portion of home equity is a different decision. The homeowner generally retains ownership while the lender holds a lien, subject to the loan terms.

The tradeoff is that interest and applicable costs may accrue to the loan balance over time, which reduces the equity remaining in the property. That is a real consideration and should be weighed with your tax and legal advisors.

The right answer depends on time horizon, estate objectives and how the property fits into an overall balance sheet. Eligibility and availability vary by borrower, property, program and lender requirements.