I understand the price of the home has gone up since the purchase so there’s let’s say $30k in equity. How are they entitled to this $30k just magically? Does their mortgage balance increase too kind of like they took a loan out?
In: Economics
They still have to qualify for it since it is considered a loan, and they still have to pay it back. It’s not like you just refinance and suddenly have a windfall, as you would if you actually sold your house and the equity was yours to pocket.
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