Selling your home for a profit can mean a substantial windfall. But in the meantime, while you're living there, that gain is locked up, out of reach.

For many homeowners, having home equity is like having a large savings account. It represents a substantial cash reserve you can draw upon when needed. But what’s the best way to access it? Two of the most common ways are through a home equity loan/line of credit or a cash-out refinance. Each has certain advantages or disadvantages.

Option Finance Definition What is a ‘Call Option’. Call options are an agreement that give the option buyer the right, but not the obligation, to buy a stock, bond, commodity or other instrument at a specified price within a specific time period. The stock, bond, or commodity is called the underlying asset. A call buyer profits when the underlying asset increases in price.

To find out how much equity you have, calculate the difference between what your home’s value is and how much you still owe on the mortgage. If that number is positive, you’re a candidate for a cash-out refinance or a home equity loan. To find out which option may be best for you, learn more about the pros and cons of each below. Home.

If you are wondering whether or not to take out a HELOC or home equity loan as a second mortgage, here are some tips to help.