If you’re sitting on equity in your home, did you know you can use it for good? And, in many instances, you can write off the interest earned from your taxes. Here are three great ways to use the equity in your home.
1. Make major home renovations.
Typically, major home renovations require large amounts of money – whether you’re putting in a pool, adding on to your home, or putting in a new kitchen. A home equity loan allows you to pay one lump sum for the renovation.
2. Pay for college expenses.
We all know a college education can be quite expensive. But, did you know you can use the equity in your home to pay for it? Use a home equity loan to pay for everything upfront for the year. The beauty of using a home equity loan is the rates are usually lower than student loan rates, which saves you a lot of money over time. However, you’ll have to make payments on that loan immediately as opposed to a student loan that doesn’t require payments until after graduation.
3. Consolidate your loans.
Many people choose to consolidate their loans into one lump-sum payment using a home equity. In many instances, the rates will be lower (especially if you’re consolidating a credit card or personal loan), and you’ll be able to make one payment each month instead of multiple payments for multiple accounts. The trick is to avoid using the credit you consolidated; otherwise, it’s not that wise of a decision.
Although you can use your home’s equity in various ways, be aware that any way you use a home equity loan puts your home at risk. Just stay disciplined and committed to making your payments on time, and you should see significant savings over time.
How DuGood Can Help
Think a home equity loan might be the right solution for you? With our EZ Mortgage app, applying is easier than ever before. You can apply directly from your phone or tablet—and you'll know if you've been pre-qualified within one day!
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