Tapping into your home’s equity is a way to get quick access to cash and knock some big items off your to-do list. With a Home Equity Line of Credit (HELOC) your credit limit will be based on your current home valuation, and it offers the flexibility of accessing the money when you need it. A big benefit of a HELOC - You only pay interest on what you actually use.
Here are some common reasons to take out a HELOC:
Home improvement is one of the main reasons homeowners take out a HELOC. Making improvements to your home not only makes it more comfortable and aesthetically pleasing, certain upgrades can have a significant impact on your home’s overall value.
According to research, the top two areas of a home to upgrade are kitchens and bathrooms. Done right, they add the most resale value.
Some homeowners use HELOCs to consolidate credit card debt since it typically offers a lower interest rate. If you’re considering paying off your credit card debt with a HELOC, it is best to have a long-term plan in place to ensure you can pay off the loan.
It’s always a good idea to have an emergency fund, and your home’s equity can help. Large medical bills, loss of a job, or any other unexpected, costly life event can be a good reason to utilize equity.
Using the equity in your home can be a smart way to pay for college. A HELOC may offer a lower interest rate than other loan options.
While some vacations can be covered within a family’s normal budget, many popular destinations can cost thousands of dollars. Using a HELOC can help finance your vacation plans without the worry of using a credit card or putting a strain on your normal budget.
Every time you pay down your mortgage loan or do something to increase the value of your home, you build equity. Equity is a major benefit to owning a home and a key piece of a homeowner’s financial security. These are just five ways you can utilize your equity, but truly the possibilities are endless.