Using Equity In Home
3 Ways to Use the Equity in Your Home
As a homeowner, your monthly mortgage payments are adding to the equity you have in your home. The longer you own your home, the greater your equity. Your equity can be used as a great tool on your financial journey - here are three examples of how to use home equity:
- Home equity rates are often much lower than the interest rates on credit cards, auto loans and sometimes even student loans
- By consolidating multiple debts into a home equity loan, you can spend less on interest each month and more on paying down your principal
- The interest payments made on a home equity loan are tax-deductible up to $100,000
Home Improvement Projects
- Using a home equity loan for home improvement projects that add to the overall value of your home, like kitchen and bathroom renovations, can make a great deal of sense.
- Make sure that you're only borrowing an amount that you can afford to pay back, so that you can still fully enjoy the final outcome of your project
- Home equity lines of credit allow you to access a percentage of your home's appraised value as cash (i.e. when you make a "draw" on your line of credit)
- In the case of an emergency, this would give you instant access to money that you may not have in savings
- Just remember that you'll need to pay back any amount that you've withdrawn and any applicable interest, so hold yourself accountable to only accessing the funds in a true emergency
Understanding the options for using the equity in your home is something we'd love to talk with you about - connect with us today.