One of the most valuable parts of being a homeowner is the financial power and freedom you get when you build equity. There are several ways to use home equity to your advantage, and in this post, we share some of the more creative ways you can use that equity to reach your financial goals.
1. Sell and use the profit to upgrade to a new home
If you’re ready for a new place, selling your current home after building up equity could help you get into the home of your dreams.
2. Refinance and get cash
If your current home could use a little love, consider a cash-out refinance. You can use the cash to remodel your kitchen, upgrade your bathroom, or make other big renovations that have the potential to add value to your home. You may even be able to afford an addition.
3. Refinance and pay down high-interest debt
Home equity can be particularly useful if you’re making a lot of monthly payments on high-interest debt. You can refinance or use a home equity loan to consolidate or pay down your debt and reduce the amount you’re paying in interest. In many cases, you can eliminate many monthly debt payments while keeping your mortgage payment close to the current amount.
4. Use a home equity loan to reach big goals
If you’ve dreamed of starting your own business or are looking for a way to help pay for your kids’ education, a home equity loan could help. It isn’t always the right financial move, but your Loan Officer can help you evaluate your goals and options to decide if it is right for you.
5. Get emergency funds
If things are tight, leveraging your home equity to get you through an emergency could give you the jump-start you need to get on your feet again.
6. Invest in other property
Home equity can also help you get the funds to invest in other property while you keep your current home. This is a great opportunity to use your equity to build more equity in the future.
Common tools for using home equity are refinances, home equity loans, and home equity lines of credit. Your Loan Originator can help you evaluate your options and find the solution that is right for your unique needs.
*When it comes to refinancing your home loan, you can generally reduce your monthly payment amount; however, total finance charges may be higher over the life of your mortgage loan.
Original blog post by Primary Residential Mortgage, Inc. https://www.primeres.com/about/blog/article/2020/10/26/creative-ways-to-take-advantage-of-home-equity