3 Creative Way To Use Your Home Equity Wisely
Throughout much of last year, record low mortgage rates fueled the fire for an unusually strong real estate market and home buying frenzy. And as housing prices continue to soar, and the demand for homes still far outweighs the supply, homeowners are left reaping the extremely profitable benefits of the booming market.
“As property values continue to rise, so does the equity in your home,” said Amy Wilemon, Senior Loan Originator with The Wilpower Team at Silverton Mortgage. “In most cases, your home equity simply builds over time as you pay down your mortgage or make certain improvements that add value. But over recent months, we’ve seen homeowners gain value in their home at a rapid rate simply because of what’s happening in the market.”
So how does a homeowner take advantage of their newfound home equity? Check out these three creative ways you can use your equity wisely.
Use home equity to make improvements and add more value to your home.
Making certain improvements or updates to your home can help increase the value of your property. Additions, kitchen renovations and bathroom remodels are at the top of the list when it comes to upgrades that maximize your home’s value. Tapping your home equity to finance projects that add value to your home can be a very wise investment.
Fund a down payment using the equity in your current home
According to Amy, many homeowners are choosing to use equity from their current home to finance a down payment for an investment property or vacation home.
“Conventional home equity loans, home equity lines of credit (HELOC) and cash out refinance are all great ways homeowners can access equity to use for a down payment on a second home,” Amy said. “Utilizing the equity in your current home to purchase a vacation home or income generating rental property is a great way to build real estate assets that can generate more income for you in the future.”
Access your home equity to pay off debt or finance the future
Interest rates for a second mortgage are usually much lower than credit cards. A cash-out refinance can be beneficial if you’re looking to pay off high interest debts, such as car loans or credit cards. This option can also free up your cash flow and help improve your credit score, which could provide an additional refinance option for you in the future.
One of the main advantages of a home equity loan is you can access the cash immediately. If you find yourself facing a financial emergency or need access to cash right away to pay for things like educational expenses or a wedding, a home equity loan can be a good option, too.
Is a home equity loan right for you? The Silverton Mortgage Wilpower Team can help.
Whether you’re looking to rehab your current home, cash out to consolidate high interest debt, or use your current property to help finance a new one, the Wilpower Team at Silverton Mortgage can help. We’re committed to making your experience as stress-free as possible with our reasonable lending terms and mortgage rates, and unmatched customer service experience. Contact us today!