The last several years have been very good for property values in most areas of the United States. Homeowners in 15 metro areas likely to have accumulated home equity gains in 10 years enough to purchase a typical single-family home
You may be asking yourself how best to put your equity to work for you. One option, of course, is to leave it alone and reap the rewards when you eventually sell. For many of us, however, there are good reasons for tapping into it now. Here are the best 3 reasons to use your home equity.
If you have multiple credit cards or other debts you may be able to substantially lower your overall monthly payments. It’s important that you have a plan in place to keep the balances from creeping up again, but with the lower overall payments, you could also have the opportunity to make extra mortgage payments and pay your loan off early.
You may wish to purchase an investment property or make some other sort of investment purchase. This can be a terrific use of equity, but it’s important to consult with your tax professional for any ramifications depending on the type of investment you wish to make.
There are as many reasons for home improvements as there are homes, but for most people, they fall into two categories. The first category is to make upgrades to help fit your lifestyle. Perhaps you need more bedrooms, or the kitchen has avocado appliances (no one has time for that!) or the bathroom needs the shower updated to fit your now 6’3” son. These updates would be something you’d consider to make your home habitable for you and your family for some time period of 3 or more years.
The second type of improvement is to prepare your home for sale. This could mean any of the kitchen or bath upgrades noted above, or it could mean a paint job or landscaping to give your home more curb appeal. Be sure to talk to your real estate agent prior to making decisions about what improvements to make if your goal is to sell your home for top dollar. They will have ideas and guidelines for what improvements earn the most bang for your buck in your market.
All in all, equity can be a great tool to use when you’re in need of a large sum of money for any reason. Are you interested in finding out whether a refinance makes sense for you? Contact us today!