Surprise: your home might be a treasure trove. No, we're not suggesting you start hacking into the walls hoping to find hidden gems; we're talking about tapping into your home's equity.
WARNING: This blog is not intended to offer financial advice. It is factually outlining your options. Always speak to a mortgage lender before making any decisions.
Your home is so much more than just a living space; according to Bankrate:
…the home equity stake of the average American homeowner with a mortgage is worth just over $274,000, as of the first quarter of 2023.
Can you believe how much money our homes have accumulated for us? For many homeowners, they’re happy to let that equity just sit there and accrue. You? You might have incredible plans for that equity. Let’s talk about what your options are:
Your Ticket To Renovate
Dreaming of a kitchen straight out of a glossy magazine? Perhaps you want to build a backyard oasis with salt water pool and English Garden? An equity release tool like a Home Equity Loan* or Cash Out Refi* might be just what you need. There’s many reasons why you might want to use your equity for a home renovation:
- Boost Home Value: If you take the time to plan with a local real estate professional, you can make smart moves to increase your home’s market value.
- Personal Enjoyment: Besides the financial benefits, renovating your kitchen, for example, can enhance your quality of life. A functional and beautiful space can make cooking a pleasure, not a chore. Or you might be looking to add another bathroom, so your family isn’t fighting over one shower every morning!
- Energy Efficiency: Upgrading your home with energy-efficiency in mind can reduce your utility bills, saving you money in the long run. For example: installing energy-efficient appliances, upgrading the roof or HVAC system, ensuring your walls are sufficiently insulated, etc.
HELOC: Your Flexible Friend
Are you surprised to learn you can use your equity as an emergency fund? A HELOC* might be the perfect tool for you if you’re looking to use your home as a safety net (always seek financial advice!).
A HELOC is a revolving credit line, kind of like a credit card, but using your house as collateral. Once the application is complete, you can tap into it when you need it, for whatever you need it for: emergencies, a whole-house renovation, or even a series of smaller home projects – it’s your call.
Investment Property
Did you know you can use your current home to buy another property? For those savvy investors with multiple units in their investment portfolio, many started with just one home: their family residence.
By pulling out the equity they accrued in their primary residence, they were able to fund a downpayment on a second property that they filled with tenants. (And imagine the possibilities: you pull out the equity you accrue in your second property to buy a third, and so on!)
Speak to a mortgage lender about what equity release tools are available to you, and be sure to speak to a local real estate agent to be sure you’re making a smart investment purchase!
Ready to Dig into Your Equity Treasure?
Before you start planning that dream kitchen or property empire, it’s crucial to chat with a mortgage lender. They’re the map holders to your treasure chest of equity, offering insights and advice on the best route to take for your financial and personal situation.
*Not financial advice. Speak to a financial advisor or mortgage lender!
