10 uses for a home equity loan
Home equity can be used for more than renovating or fixing your home, including paying for college, consolidating debt and more.
Tags: Credit, Home improvement, Home, Home equity, Loans
Published: January 10, 2020
Home equity loans are pretty straightforward: You borrow money against the amount of equity you have in your home. Equity is the difference between the market value of your home and what you owe on your mortgage. For instance, if the market value of your home is $150,000 and you owe $100,000, you have $50,000 in equity.
There is usually a lot of flexibility in how you use a home equity loan. Keep in mind: If you are thinking of selling your home in the near future, the home equity loan would be paid in full at the time of the sale.
Here are 10 reasons to consider tapping into yours:
Funding a student loan for yourself or your child
Paying off or consolidating credit card debt
Funding a vacation
Paying for weddings or important celebrations
Starting a business
Making home improvements and upgrades
Paying medical bills
Making key purchases, such as a car or a truck
Funding investments
Set aside for an emergency fund
Advantages of home equity loans
- Using a home equity loan can have several potential advantages:
- The interest rates for home equity loans are fixed, instead of variable, and your monthly payment is consistent, so you never have any surprises.
- You can pay for big purchases little by little.
- The interest rate you pay on a home equity loan is often lower than those for credit cards or other types of loans.
- You can usually get access to funds quickly, sometimes within days of completing the loan documents.
- You also might be able to deduct the interest you pay on a home equity loan. Talk to your tax1 advisor for specifics.
Do you want to know more about home equity loans or how you can make the equity in your home work for you? Get the details on U.S. Bank rates for home equity loans.
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