Have a Lot of Home Equity? Not Sure What You Can Do With It? Get Ideas Here!

Ellis-Hampton_House_-_Pendleton_OregonHome equity. We all strive for it but depending upon your long term goals you may or may not have a better use for the money then just letting it sit. We found this article with four different uses that might get your wheels spinning on better uses for the money. We hope it helps!

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From the article:

Home equity loans can put you well into the black, financially speaking, provided you don’t use the lending strategy as a stepping stone to even more debt.

Home equity money is yours to use as you wish, but most home owners focus on several economic priorities when they cash in on home equity loans.

1. Transform many bills into one
Debt consolidation is by far how most home owners use home equity loans. It can also be the riskiest way to use the home equity loans.
If you’ve racked up bank credit card debt, retail credit debt and other debts, home equity loans can pay them all off leaving you with one monthly bill that’s likely smaller than the others combined. It’s also a good chance the interest rate will be half what you were paying on just one credit card. The rate on home equity loans is cheaper because, unlike credit cards, the debt is secured by your home. Additional debt-cost savings are available because with the consolidation you’ll likely pay off your debt sooner. Along the way you’ll get to deduct the interest, up to the legal limits allowed for home equity loans.

Aside from the savings of home equity loans, a single monthly bill can also improve your cash flow, leaving you with more disposable income to save or invest. And over time, the single monthly payment also improves your credit profile, revealing to lenders that you are a less risky borrower who isn’t over burdened by debt.
However, the need for home equity loans could indicate a credit habit the home equity fix might only exacerbate. Homeowners should consider how to prevent themselves from scoring more credit before securing home equity loans.

Don’t just pay off your old debts, cut up all but one card for emergencies and consider debt counseling to learn how to budget your income.
Be sure to write a letter to your creditors telling them to close your accounts so you can’t get at them and your credit report doesn’t show you’ve got unused credit you can still tap.

If there’s a difference between what you were paying each month on all your debts and the home equity loan’s payment, save it and learn to use cash where possible.
Do not take on additional debt while the home equity loan is still outstanding.

Looking to remodel your kitchen? Checkout this article with kitchen remodel ideas for busy homeowners that could be of interest to you.

For all the uses click here: http://www.realtor.com/home-finance/home-equity/4-great-uses-of-home-equity-loan.aspx

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