5 Reasons to Tap into Your Home's Equity

If you're a homeowner looking to make a big purchase, you may have some financing options available to you in the form of home equity. Home Equity Loans and Home Equity Lines of Credit (HELOC) are two affordable borrowing options that use the equity of your home as collateral. Home Equity Loans come in the form of one lump sum, and HELOCs are an ongoing line of credit for ongoing projects or expenses. Neither of which must be used on your home. In fact, there are many smart reasons to use your home's equity.

Home Renovations or Repairs

There are many great projects that you can complete on your home that will increase its value. Kitchen remodels, deck additions, and roof repairs are all home improvements that are more likely to recoup their cost in home value.

Debt Consolidation

If you have major debts across multiple sources, debt consolidation could be in your best interest... literally! Many times interest costs could keep you in debt. Using your home's equity to consolidate your debts into one loan can help you get your head above water. A consolidated loan could offer you a lower interest rate than what you were paying on your multiple loans and help you pay off your debt faster. Loans have a repayment timeline, as opposed to credit card debt, so when you pay your loan off sooner, you pay less in interest overall.

College Tuition

It's no secret that the price of attending college can be burdensome for many. If you've filled out the FAFSA and are left thinking "what else" to cover the remainder, look no further! Using a Home Equity Loan or HELOC for tuition keeps you away from predatory lenders and could offer a lower, fixed interest rate.

Emergency Fund

According to a recent Bankrate survey, more than half of Americans couldn't cover a $1,000 emergency. If you've found yourself in this group, you know the pressure that having an emergency fund can alleviate. Keeping some money squirreled away for a rainy day could save you in the long run.

Major Purchase or Travel

Are you feeling stressed out about everything? Treat yourself! Whether that's to take a trip to recharge or make a purchase that could improve your quality of life, using your home's equity to maintain your mental health is an investment in yourself.

To learn more about home equity loans and lines of credit and the possibilities they could offer you, click here.

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