Borrowing money to increase your spending power can be a smart financial move. Under the right circumstances, using a home equity line of credit (HELOC) can open the door to fantastic returns. When you're strategic about leveraging the equity in your home, it's possible to reach financial goals sooner and save money while doing it. While a HELOC can be used to pay for almost any expense, five specific uses garner the most attention. Read on to discover why.
Category: Home Equity
College decision letters are on their way to a home near you. Maybe someone in your household is expecting one soon. What you might not be expecting is the lean financial aid award package that accompanies many college acceptance notifications.
Financial experts recommend households maintain an emergency savings account equal to six months of living expenses. A hefty savings balance ensures there's enough money to pay bills and buy groceries in the event of an unexpected job loss, health diagnosis, or significant expense that would otherwise derail your budget. Many Americans fall short of this savings ideal. A recent Economic Well-Being study found that four out of ten U.S. households would have trouble covering an emergency expense as small as $400.
Homeownership has its advantages. Saying “goodbye” to renting often means saying “hello” to increased square footage, stable housing payments, and potential tax benefits. It also provides an opportunity to build equity, the difference between the mortgage balance and the market value of the home, in an appreciating asset. The good news gets even better when homeowners learn they don’t have to sell their homes to access that equity. They can use a home equity line of credit to access the cash value in their homes today.
A home equity line of credit, aka HELOC, makes it possible for many Americans to purchase a second home, complete a delayed home improvement project, pay off high-interest rate credit card debt or achieve any number of financial goals without selling their primary residence. The popularity of HELOCs continue to rise.
Homeowners who need additional funds to pay for college, buy a second home, consolidate high-interest debt, or pay for a special event often find themselves unnecessarily stumped by the question “How am I going to pay for this?” Many homeowners can avoid accessing savings or borrowing against a retirement account to pay for these and other expenses. They can do so by tapping into the equity in their home.
Some people look forward to tax season as much as a visit to the dentist’s office. Others are excited about the possibility of a sizeable tax refund and view April 15 with great anticipation. In either case, this year’s tax filing won’t be a simple repeat of last year.
If you’re looking to borrow money, you’re undoubtedly aware that there are many loan options to choose from on the market today. When shopping for a loan, you will notice that loans typically fall into two categories, secured and unsecured. Your borrowing need and financial circumstances will ultimately determine which type is the best fit for you, but it’s also important to understand the basic characteristics of the each loan.
Borrowers looking to apply for a Home Equity Loan or Line of Credit are likely to hear the term "second mortgage" at some point as they are shopping and applying for a loan. Although a common term, it's one that is often open for misinterpretation. In our latest blog, we review this terminology and bring clarity to it.
Let’s face it, life can be expensive. Even with the best planning, you will still have times where you will need to borrow money. Here are some of the most common things, outside of home improvements, that might require a loan to finance a portion or all of the expense.