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Make your move! From home renovations to dream vacations, here are seven different ways to use a home equity loan for some of life’s biggest moments – without missing a beat.
Tapping into your home’s equity can be a smart way to transform your house into your dream home or pay for large expenses.
But first things first: what exactly is home equity? In a nutshell, it’s the difference between what your home is worth and how much is still owed on your mortgage. As your home’s value increases over time and you pay down the principal, your equity will continue to grow.
While situations may vary, some lenders will let you borrow up to 90% of your home’s current value.
So what makes a home equity loan different?
From tackling a renovation to finally taking that dream vacation, here are seven reasons that you may want to tap into your home’s equity.
You guessed it! Maybe you’ve always wanted a chef’s kitchen. It’s finally time to finish the basement. Or maybe you’d love to put in a fence or remodel the bathroom with a walk-in shower. Whatever’s on your list, a home equity loan can be a smart way to increase the value of your home.
Whether you’re replacing flooring or reimagining your master bath, you and your family can relax and enjoy soaking up those improvements to your living space, too.
If you plan on tackling ongoing projects rather than one big renovation, a revolving home equity line of credit (HELOC) is a more flexible way to cover a variety of expenses over time. Ask your lender what’s the best fit for you!
Have credit card debt or other loans with a high interest rate? Consider consolidating those debts into a home equity loan. With a low fixed rate, it can simplify and streamline your finances with a single, easy payment. Not to mention, it may be able to save you hundreds – or even thousands – in interest.
Curious how much you could save by consolidating multiple credit cards or loans? Use our handy calculator to compare the numbers and estimate your monthly payment!
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Sometimes a large one-time expense can be difficult to cover with savings alone.
And when it comes to weddings in particular, that once-in-a-lifetime day can come with a big price tag. In fact, the 2022 average cost of a wedding was $20,000 in North Dakota and $25,000 in Minnesota. A home equity loan can be an affordable option to fund that fairy-tale day and still stick to your wedding budget.
Sometimes we all need a little reminder: life is short.
Maybe you’ve always wanted to take a two-week trip exploring the beauty of New Zealand. Tour Scotland and Ireland with your family. Or soak up the sunshine with a few long-time friends at an all-inclusive resort in the Bahamas.
When it’s finally time for that getaway of a lifetime, it could have a hefty price. Tapping into your home’s equity may be a simple way to foot the bill – complete with a low interest rate.
When student loans aren’t available – or simply aren’t enough – a home equity loan may be another solution to help cover college expenses for you or your loved ones.
The first and only program of its kind in the nation, our BetterLife™ Student Loan is another way to consolidate student loan debt with no fees and a low fixed interest rate. The process is simple, and it saves our customers about $10,100 on average in interest.
Start by asking your employer if they offer financial assistance for furthering your education and training. If assistance isn’t available, a home equity loan may be a useful option if you want to increase your earning potential through career development courses, bootcamps or advanced degrees – without having to dip into your savings.
Using a home equity loan to grow your business or start a new enterprise can pay off, if handled responsibly. Before you commit, be sure to run the numbers. Carefully evaluate your business plan, and keep the overall health of your business in mind.
You may want to talk to your lender about a variety of different business options, such as equipment, term and real estate loans, too!
Have any other questions about home equity loans? Just ask! At Gate City Bank, we’ll listen and help you understand your different options with local financing – personalized for you, your home and your wish list. From that kitchen renovation to your long-awaited vacation, let us know how we can help!
Thinking about a home equity loan? Try our handy calculator to estimate your monthly payment!
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