4 good reasons to consider applying for a home equity loan
A home equity loan allows you to draw on a percentage of the equity you have in a piece of real estate and use it to accomplish some financial purpose. There are a number of offers for home equity loans and lines of credit on the market today. That means you should consider offers carefully and opt for the one that offers the right combination of benefits and features.
What can be done with a home equity loan? Essentially, you can do whatever you want with the money. Here are four of the more common examples of how people choose to use the loan proceeds.
Consolidate Your Debt
Debt consolidation is easily one of the most popular reasons why homeowners take out these types of loans. Since the home’s equity serves as security, you’re likely to lock in a great interest rate. That makes it possible to pay off unsecured debt that carries a higher rate of interest. It also streamlines the obligations that you have to keep up with every month. As long as you can avoid creating new debt, this is a great way to improve your financial situation and protect your credit rating.
Make Improvements to the Home
A home equity loan can be used to make improvements to the home. Use it to replace an aging heating and cooling system, install new windows, or replace the roof. You can even use the money to add another wing to the home. You’ll find drawing on the home’s equity often means enjoying better terms than you would get with other types of loans.
Finance a Major Purchase
You need money to replace a major appliance or buy your child a good-quality used vehicle. Have you considered how using a home equity loan might be better than other forms of financing. It’s not unusual for Kitchener second mortgages to be used for these types of purchases simply because the interest rate is lower. Think of what that would save you over the life of the loan.
Money for a Vacation
Everyone needs the chance to get away now and then. You have enough vacation days on hand to be away for a couple of weeks. The only problem is that you don’t have enough cash to fund the vacation proper. That’s where the money from a small home equity loan can come in handy.
Borrow the money at a decent rate rather than charging everything. Go on the trip and enjoy every minute of being on vacation. When you return, it’s easy enough to begin making payments on the loan. You keep the credit card balances free for emergencies and will likely be able to pay off the loan a lot faster thanks to the lower interest rate.
These are only some of the ways that the money from a home equity loan can be put to good use. Do you have some other project in mind, such as starting your own home business? If so, find out how much equity you have in the home. If it’s considerably more than your project would need to be fully funded, talk with a lender today. You could have the money in your bank account in just a few days.
