If you’re a homeowner, you’ve likely heard of home equity. After all, it’s one of the primary benefits of buying a home. You build equity in your home over time, and you can borrow against that equity with either a loan or a line-of-credit.
Let’s say you’ve made the decision to use your home’s equity. Do you have a plan in place for the money?
Many homeowners use their equity to cover the cost of home renovations. Depending on the type of renovation, not only could you increase the value of your home by up to tens of thousands, but you could also recoup most of your expense in the form of added home value when it comes to selling down the road.
Other uses for your home’s equity include consolidating debts and emergency expenses. If your car needs a high-dollar repair or you’d like to pay off high-interest credit card debt, using your home’s equity could cover you there.
But you shouldn’t use your home’s equity for every sort of expense.
Buying luxury may not be the smartest decision when using home equity. Spending excessively on expensive vacations, luxury cars or high-dollar clothing is a quick way to run into trouble.
In short, you shouldn’t use your home’s equity to finance something that won’t pay off in your favor down the road. Try to avoid borrowing more than you need and don’t overspend.
If you’ve decided to use your home’s equity to cover expenses—whatever they may be—Vantage is here to help. Whether you’d like to open a line-of-credit with your home’s equity or get a home equity loan, our Financial Coaches are available to discuss your options and help you determine the best course of action.
Are you ready to put your home’s equity to work for you?