Utilizing the equity in your home is a great way to start your next project or use the funds in the event of an emergency. Below we have some tips on how to use your home equity:
- Home improvements – If you have the disposable income, many experts advise to do home improvements to add value to your home.
- Emergencies – Home equity loans are a good use for emergencies in the event of job loss, unforeseen medical expenses, etc.
- Real estate – A real estate investment is a great idea for a home equity loan, as long as the income from rent pays for the cost of the loan.
- Debt consolidation – Paying off high interest rate credit cards is a good idea, as long as you don’t plan to accrue a substantial debt again.
- Vacation – Home equity loans are a great cushion to pay ahead and start planning your next vacation.
Here are some tips on what not to do with your home equity loan:
- Don’t fund a lifestyle – Sure you can use your home equity loan as you wish, but make smart decisions on how you borrow to ensure you can repay your purchases.
- Don’t pay for basic expenses/bills – Basic expenses, such as groceries, clothing, utilities, and bills should be part of your standard household expenses. If your budget does not cover these expenditures, then it’s time to rework the budget.
- Don’t sign anything without reading it – Make sure you know what you are signing, and make sure you ask questions about your loan! We are here to help answer any questions!