How can you use your home equity to your advantage? Find out right here.
When your home’s value appreciates over time, that generates a lot of equity. There are a few ways you can benefit from your home’s equity:
1. Get a home equity line of credit (HELOC). With this, you’re essentially borrowing cash against your property. If you have credit card debt, home repairs to make, or other expenses you need to take care of, a HELOC is a great means to do so.
2. Do a cash-out refinance. If you have a certain amount of equity in your home, a cash-out refinance will allow you to refinance the home. Yes, this may make your mortgage balance higher, but you’ll either get a better interest rate than what you can get in today’s market, or you can actually borrow cash from the property and put it into your bank account. One benefit of doing this is that it’s not taxable.
“In today’s market, there are many ways that you can use your home’s equity to your advantage.”
3. Use the equity to move up. If, say, your house has appreciated by about $100,000 since you bought it, you can sell your property, pull that cash out, put a down payment on your next property, and then you can put some money in the bank—on top of moving up and buying a nicer or more expensive home.
As you can see, in today’s market, there are many ways that you can use your home’s equity to your advantage. If you have any questions about these strategies, how much equity is in your home, or about your home’s value in general, don’t hesitate to reach out to me. I’m always here to help.