7 Things You Can Do To Build Wealth With The Equity In Your Home
If you’ve heard about the real estate market these days and the term “HELOC” or “Home Equity Line” has been mentioned to you….but you’re not sure what that means or what it even has to do with you… you’re in the right place. We’re about to get into it.
Did you know there are 7 things you can do with the equity in your home that can actually BUILD wealth.
A HELOC or a Home Equity Line of Credit is a loan you can obtain from your bank that borrows against the equity in your home. These loans usually have fairly low interest rates and a fixed repayment timeline.
With the rise in home equity this past year, home equity lines of credit have been a hot topic.
Here are 7 things you can do with the equity in your home to build wealth:
1. Pay off credit card debt - the average interest rate on a credit card is 16%. With lower interest rates on HELOC loans, you can pay off that credit card and save money on interest.
2. Consolidate Debt - the key here would be choosing debts that have a higher rate than the home equity line. This could be student loans, auto loans or personal loans. Pay off credit card debt - the average interest rate on a credit card is 16%. With lower interest rates on HELOC loans, you can pay off that credit card and save money on interest.
3. Home Improvements - This would be to upgrade or improve your current property, which would in turn boost the home value again. Win win.
4. Home Additions - If you love your home, but simply just need a little more space - home additions could be the way to go. Not only are you improving the property, you are also increasing the square footage which should absolutely help increase home value.
5. Purchase an investment property - with the rental market right now this is a no brainer. This can be used over and over and over again if you’re really wanting to get savvy. Investment properties usually require a 20%+ down payment. Use the money in your house to start making mailbox money down the road.
6. Start a business - dreaming of that entrepreneurial life? Or maybe you’re wanting to bring your favorite franchise to your local area (WE’RE STILL WAITING CHICK-FIL-A!) Use equity to bypass tapping into your personal savings or taking out a high interest business loan.
7. Emergencies - the great thing about HELOC’s is that they can act like a line of credit. Only there if you need it. Ideally you’d have an emergency fund in place, but if you’re not there yet - establishing a home equity line of credit would be a great safety net.
The equity in your home can do so much more for you than you realize! Curious what your home value is worth now so you can start calculating your equity? Click here to find out!
