The last several years have been very good for property values for most areas of the United States. According to the National Association of Realtors market growth will likely flatten out a bit for 2019, but still continue to improve at a more moderate pace.
You may be asking yourself how best to put your equity to work for you. One option, of course, is to leave it alone and reap the rewards when you eventually sell. For many of us, however, there are good reasons for tapping into it now.
Here are the top 4 reasons to use your home equity:
- Debt Consolidation. If you have multiple credit cards or other debt you may be able to substantially lower your overall monthly payments. It’s important that you have a plan in place to keep the balances from creeping up again, but with the lower overall payments you could also have the opportunity to make extra mortgage payments and pay your loan off early.
- Investment. You may wish to purchase an investment property or make some other sort of investment purchase. This can be a terrific use of equity, but it’s important to consult with your tax professional for any ramifications depending on the type of investment you wish to make.
- Education. Paying for a private education, or a college education, can be expensive. Sometimes student loans are insufficient or the terms aren’t as favorable as we’d like. Using home equity to pay for tuition doesn’t come with the same strings attached, and could possibly even have tax deductible interest. Be sure to talk to your tax professional to see how this could affect your personal taxes.
- Home Improvements. There are as many reasons for home improvements as there are homes, but for most people they fall into two categories. The first category is to make upgrades to help fit your lifestyle. Perhaps you need more bedrooms, or the kitchen has avocado appliances (no one has time for that!) or the bathroom needs the shower updated to fit your now 6’3” son. These updates would be something you’d consider to make your home habitable for you and your family for some time period of 3 or more years.
All in all your home’s equity can be a great tool to use when you’re in need of a large sum of money for any reason. Contact us today to learn more about our low-rate Home Equity Line of Credit loans.
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