Great Reasons To Use Your Home Equity
Dipping into the equity of your home can be an excellent way to quickly access cash that you need to pay for renovations or improve your financial picture. It’s something that you should do with caution, however, because you are borrowing against the roof of your head.
You can compare mortgages and other options for remortgaging with websites such as Compare Credit, but it’s important to know that there are some great reasons out there for you to use it to see if you’re home, too. Home equity is a portion of your home that you’ve already paid off. It is the difference between what the house is worth and how much is owed on your mortgage. Equity can provide many opportunities for homeowners, and speaking to your mortgage provider is the best place to start when it comes to using your equity. Below, we got some of the best ways that you should consider using yours.
- To improve the house. If you think about it, your equity going back into your house is really just a great investment in you. If you’ve paid off a big portion of your home and then you want to withdraw that same amount of money all over again, you’re going to be able to improve your house, improve its value, and up your equity for next time round. You basically get to use the value of your home to increase the value in the future. Do you get it?
- To pay for school. A home equity loan is a good way to fund a college education if your lender allows it. Student loans are still the most common way to pay for an education, if you don’t have the capacity of eligibility for student loans, your home equity can fill the gap. It can be risky to take out equity but using it to pay for a college education pays for a future which can bring more money into your home eventually anyway.
- To consolidate your debt. You can use an equity loan to consolidate high interest that’s a much lower interest rate. You can pay personal debts or car loans, credit cards and more and be able to benefit from your equity loan in the end. It can help you also to reduce your monthly expenses which can make a very big difference to what you pay into your mortgage.
- For emergency expenses. Most people have emergency funds to cover up to 6 months of living expenses but it’s not the reality for Sam. Having your equity that’s back you up is really going to help you get out of across the situation, whether you have been flooded and you need to relocate, whether you have to spend out on home renovations that will repair your house after a broken, you can use your equity as a way to tap into covering yourself for emergencies.
Home equity loans are there as a last resort, so speak to your mortgage advisor before you do anything else.
- Lisa has been blogging since 2013, and loves sharing resources and ideas for living a simple life. To get free printables, bonus words, and more - sign up for the newsletter.