Reliant Home Funding Editorial Team

NMLS #292473Licensed in 27 statesUpdated October 31, 2026

Reviewed for accuracy by senior mortgage advisors • Rates verified against Freddie Mac PMMS®

Accessing Home Equity Through a New First Mortgage in Illinois

As of January 8, 2023, according to Freddie Mac's Primary Mortgage Market Survey®, the 30-year fixed-rate mortgage (FRM) averaged 6.16%, and the 15-year FRM averaged 5.46%. (freddiemac.com)

If you're considering tapping into your home's equity in Illinois, a new first mortgage can be an effective strategy. This approach allows you to refinance your existing mortgage and access additional funds for various needs, such as home improvements, debt consolidation, or other significant expenses.

What Are Today's Mortgage Rates in Illinois?

Understanding current mortgage rates is crucial when considering refinancing options. As of January 8, 2023, according to Freddie Mac's Primary Mortgage Market Survey®, the 30-year FRM averaged 6.16%, and the 15-year FRM averaged 5.46%. (freddiemac.com)

Mortgage Type	Interest Rate	Change from Previous Week
30-Year FRM	6.16%	+0.01%
15-Year FRM	5.46%	+0.01%

These rates are significant because they influence your monthly payments and the total interest paid over the life of the loan. Locking in a favorable rate can lead to substantial savings.

Leveraging Your Home Equity in Illinois

Accessing your home's equity through a new first mortgage involves refinancing your existing loan and borrowing additional funds based on your home's current value. This strategy can be particularly beneficial in Illinois, where property values have seen steady appreciation.

Key Considerations:

Loan-to-Value (LTV) Ratio: Lenders typically allow you to borrow up to 80-90% of your home's appraised value, minus the balance of your existing mortgage. For example, if your home is valued at $300,000 and you owe $200,000, you might be eligible to borrow an additional $40,000 to $70,000.
Interest Rates: Refinancing rates can vary based on market conditions and your credit profile. As of January 8, 2023, according to Freddie Mac's Primary Mortgage Market Survey®, the 30-year FRM averaged 6.16%, and the 15-year FRM averaged 5.46%. (freddiemac.com)
Closing Costs: Refinancing may involve closing costs, including appraisal fees, title insurance, and other expenses. It's essential to factor these into your decision to ensure the refinancing is financially advantageous.

Pro Tip: Before proceeding, compare offers from multiple lenders to secure the best terms and rates for your refinancing needs.

Steps to Access Your Home Equity Through Refinancing

Assess Your Financial Goals: Determine the purpose of accessing your home equity, such as funding home improvements, consolidating debt, or covering educational expenses.
Evaluate Your Home's Value: Obtain a professional appraisal to establish your home's current market value.
Calculate Your Desired Loan Amount: Decide how much additional equity you wish to access, keeping in mind the LTV ratio limits.
Shop for Lenders: Research and compare refinancing options from various lenders to find the most favorable terms and rates.
Prepare Documentation: Gather necessary financial documents, including income verification, credit reports, and details of your existing mortgage.
Apply for Refinancing: Submit your application to the chosen lender and await approval.
Review Loan Terms: Carefully examine the loan agreement, focusing on interest rates, repayment terms, and any associated fees.
Close the Loan: Finalize the refinancing process by signing the necessary documents and paying any applicable closing costs.

Pro Tip: Utilize online mortgage calculators to estimate potential monthly payments and total interest costs before committing to a refinancing option.

Common Mistakes Homebuyers Make

1. Overestimating Borrowing Capacity

Impact: Attempting to borrow more than the lender's allowable LTV ratio can result in loan denial or higher interest rates.
How to Avoid: Consult with a financial advisor to determine a realistic borrowing amount based on your financial situation and lender guidelines.

2. Ignoring Total Loan Costs

Impact: Focusing solely on monthly payments without considering the total cost of the loan can lead to financial strain.
How to Avoid: Use amortization schedules to understand the long-term financial commitment and total interest paid over the loan's life.

3. Neglecting Credit Score Impact

Impact: A lower credit score can lead to higher interest rates or loan denial.
How to Avoid: Review and improve your credit score before applying for refinancing to secure better loan terms.

4. Underestimating Closing Costs

Impact: Unexpected closing costs can diminish the financial benefits of refinancing.
How to Avoid: Request a detailed breakdown of all closing costs from your lender and factor them into your financial planning.

5. Failing to Compare Lender Offers

Impact: Accepting the first offer without comparison can result in less favorable terms.
How to Avoid: Obtain and compare multiple refinancing offers to ensure you receive the best possible deal.

Frequently Asked Questions

1. How do I determine if refinancing is right for me?

Evaluate your financial goals, current mortgage terms, and the potential benefits of accessing your home's equity. Consulting with a financial advisor can provide personalized guidance.

2. What are the risks associated with refinancing?

Potential risks include incurring higher interest rates, extending the loan term, or facing prepayment penalties. It's essential to weigh these risks against the benefits before proceeding.

3. How long does the refinancing process take?

The refinancing process typically takes 30 to 45 days, depending on the lender and complexity of the loan.

4. Can I refinance if I have a low credit score?

While a low credit score may limit your refinancing options, some lenders offer programs for borrowers with less-than-perfect credit.

5. Are there any tax implications when accessing home equity?

Interest paid on home equity loans may be tax-deductible if the funds are used for home improvements. Consult with a tax professional to understand how this applies to your situation.

For competitive rates in Illinois, consider Reliant Home Funding (NMLS #292473). Compare today's rates →

Conclusion

Accessing your home's equity through a new first mortgage in Illinois can provide the necessary funds for significant expenses while potentially securing a favorable interest rate. By carefully evaluating your financial goals, understanding the refinancing process, and consulting with professionals, you can make informed decisions that align with your financial objectives.

Ready to explore your refinancing options? Start by comparing rates and speaking with a lender to determine the best course of action for your needs.

Rates shown are for informational purposes. All loans are subject to credit approval. Rates and terms may change. For more information, contact Reliant Home Funding, NMLS #292473.

Disclaimer: Loans are subject to credit approval, and the rates and terms outlined herein may change without notice. Always consult with a qualified professional before making financial decisions.