Debt Elimination, Emergency Funds & Education Expenses | HELOC
Think a HELOC is only for home renovations?
A home equity line of credit, HELOC for short, is a great way to tap into the equity you have built in your home. As a versatile revolving line of credit, you have the flexibility to use it when and how you need. While many homeowners seek a HELOC for home renovations, in truth, your imagination is your only limitation when it comes to using those funds. Remember whatever option you choose to use your funds for, the collateral for your HELOC is your home. Let’s look at some of the top HELOC uses.
Yes, we just said a HELOC is great for things other than home renovations, however, it is the top use for a reason. From remodels to upgrades, any homeowner knows there is never a shortage of home projects to accomplish. By investing back into your home, keeping it in top working order and adding value, you set yourself up for equity success. When thinking about making improvements to your home, it is important to note that not all upgrades will increase your home’s value, but the below improvements could lead to a better return on investment.
- Kitchen and bath remodel
- Replace windows and/or siding
Invest in yourself
Are you thinking about going back to school? Perhaps your kids are getting ready to enter higher education and you’d like to help finance it. Maybe you need some time away to reset. Whatever investing in yourself looks like to you, a HELOC can help you with the financial part.
- Take a dream trip
- Finance a cosmetic procedure
Pay off high-interest debt or long-term expenses
Check out the interest rate on a HELOC. You might find it beneficial to use those funds to pay off your higher interest debt, large medical and long-term expenses. By doing so, you can consolidate your debt, streamline your payments, and potentially improve your credit score over time.
- Pay off mortgage
- Repay student loans
- Pay off credit card debt
- Medical payments
Prepare for unexpected emergencies
Financial experts agree, having an emergency fund to float three to six months of living expenses is best practice. However, for many who don’t have this cushion, when unexpected financial burdens happen it can create a lot of stress. Given the flexibility of a HELOC, you can feel financially secure knowing that funds are there in case of an emergency.