Best Uses For a Home Equity Loan
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How Can I Best Use a Home Equity Loan?
Equity that you have built up in your home can be a very valuable asset. When you need cash for almost any reason and you have equity in your home, your best option is often getting a home equity loan. Here are a few popular and wise uses for home equity loans.
- Home improvements – from TLC to major rehabilitation projects;
- Bill consolidation – pay off high interest rate loans or bring delinquent obligations current;
- Use proceeds to make large ticket purchases (e.g. autos) at low interest rates and, possibly, get tax deductions for interest paid;
- Use proceeds to invest in one or more additional real properties or a business.
The advantages are: low cost borrowing, possible tax deductions, inexpensive closing costs, and fast turnaround. Equity loans, if used for home improvements, should further increase the fair market value (FMV) of the property being financed which provides additional beneficial returns.