Your home equity is one of the biggest financial resources you have to take advantage of—like a private bank that only you can access. The money you’ve put into your home can be taken out and utilized for various lucrative endeavors. Here are a few examples of those endeavors, and why using your home equity is a smart financial move.
Home loan interest rates are lower than most any other loan you could find. You can pull money out of your equity to consolidate other debts—car loans, medical bills, student loans, credit card debt—all of which have significantly higher interest rates. If you can pay all of these off and leave yourself with only one payment to make, that payment having the lowest interest rate of all, you will save a substantial sum! How does refinancing help this? Once you’ve pulled money out of your equity, your existing loan on your property can be restructured to reestablish the terms of your initial loan and implement a lower interest rate. Your debts will be clearer, and you will have saved a lot of money you’d have to spend on interest!
Use the money you have put into your home ownership to improve its value: remodel it! Every renovation increases the quality and longevity of your home’s lifespan (along with everything in it). Replace damaged materials, expand rooms, add special features, or simply redo a room altogether. There are many benefits to remodeling your kitchen in particular. The kitchen is one of the most rooms in the house, making it one of the most run-down rooms as well. Kitchen remodels improve functionality, sustainability, safety, lowers energy expenditure, and is an opportunity to create a new, more modern aesthetic. The money you have “taken out” of your equity will be a lucrative investment in the future!
Invest in Something New
Use a small portion of your home equity to invest in a new business or promising stock! Whether you have an idea for a business yourself or are passionate about the ideas of someone else, making an investment in a market-driven society like today’s is a great way to get a secondary income (with a little patience.) Consult a financial advisor about safe amounts for investments and consider talking with business professionals as well to predict the successes of a company before committing.
Home equity is one of the safest forms of financial capital that you have as a homeowner. Take advantage of this solid resource and reap the benefits of your smart financial moves!
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