If you’re a homeowner, you likely already know that you can tap into the equity built into your home and use the funds for a variety of purposes. The longer you own your home, the more equity is earned. Home equity lines of credit (HELOCs) aren’t your traditional loan – they’re reserved for homeowners, and they’re essentially a return on your investment, with lower interest rates and easy access. So, if you’re interested in applying for a HELOC, how should you use it?
Here are a few popular ways you can use your HELOC:
Easy home renovations.
You may have a desire to give your home a visual face lift. Or, you might have repairs that need immediate attention. When you use your home’s equity to improve the function and visual features of your home, you’re also increasing its value in the case you might choose to sell it. Whether you need new countertops, upgraded rooms, or even just a fresh coat of paint, your HELOC can go a long way in making your home a more beautiful and functional space.
Medical costs.
Even with health insurance or Medicaid, healthcare doesn’t always come cheap, and unexpected medical bills can lead to serious financial dire straits for those who are unprepared or who experience emergencies. If you’re facing medical costs that are out of your current budget, consider a HELOC to prevent further financial stress.
College costs.
If you or one of your adult children is considering higher education, why not consider a HELOC to offset some of the expenses associated with college? Books, meal plans, and extracurriculars can add up cost-wise, especially when you factor in the cost of tuition and room and board, but tapping into your home’s equity to cover those additional costs can pick up the slack.
Unexpected emergencies.
When an emergency strikes and you’ve got an unexpected bill that needs to be paid, you can use your HELOC to cover the cost. Veterinarian bills, traffic citations or car accidents, and unexpected hospital stays can be covered with the funds in your HELOC.