A home equity loan lets you use the equity you’ve built in your home in any way you choose. Continue reading for some of the best ways you can utilize your home’s equity!
Home improvements: One of the most popular uses for home equity is for home renovations and improvements. These can be as major as adding a 1,000-square-foot extension to your home, as minor as replacing old carpet with new hardwood flooring or anything in between.
Using your home’s equity for home improvement projects is a smart choice for multiple reasons. For one, the money you put into the renovations acts as an investment. If you choose improvements that increase your home’s value, you can make back the money you spent or even see a return when you sell your home. Also, if you use the funds from a home equity loan to increase your home’s value, you may be able to deduct the interest paid on the loan from your taxes (be sure to consult with your tax adviser if you plan to go this route).
If you plan to use your home equity funds for home improvements, be sure to choose wisely. It’s best to go for improvements that add lasting value to your home instead of spending money on remodeling projects that may look dated just a few years down the line.
Debt consolidation: Another popular use for a home equity loan is to consolidate high-interest debt. Paying off multiple debts at high interest rates can be difficult to manage. The heavy interest rates mean more of the borrower’s money goes toward the lender and less goes toward paying down the principal of the debts. Using a home equity loan to consolidate debt to a low-interest loan can save money and help shorten repayment time by several years.
Emergency fund: Financial experts recommend having three to six months’ worth of living expenses saved in an emergency fund to be used if the need arises. If you’ve been struggling to get your own emergency fund off the ground, tapping into your home’s equity can be a great way to get that boost you need. You will have a large stash of cash to build your fund, and the manageable payment plan will help ensure you put money into savings each month. As a bonus, if you experience a financial emergency of any kind after taking out your home equity loan, you will already have the funds on hand to help pull you through.
A home equity loan can provide homeowners with the funds they need for a home improvement project, to get their debt under control or to build an emergency fund. If you are ready to take out a home equity loan, look no further than SeaComm. Give us a call at (800) 764-0566 or stop by one of our nine convenient branch locations to meet with a SeaComm representative!