Have you been thinking about using the equity in your home to invest, pay off higher-interest credit card debt, or pay for education or an experience you’ve always wanted, like a dream vacation? 2020 could be the year to take this step because interest rates on home equity loans are expected to stay at low levels.
If you are 50% optimistic, can you utilize equity in your home for investment in the present market conditions?
If you’re confident that your investment opportunity will pay more interest than your home equity loan will cost, then of course you can use the equity in your home to fund an investment. You shouldn’t take money out of the equity in your home if you’re not confident that the investment opportunity will pay enough in interest, but if you’ve built up significant equity in your home’s value, you can investigate opportunities for lower-interest home equity loans.
With the new normal we have today, is it possible to pay off a debt with a high annual percentage rate over a home equity loan or through a line of credit?
You can use a home equity loan (HEL) or home equity line of credit (HELOC) any way you choose. With the low-interest rate forecasts for 2020, if you’re paying a credit card bill with a high rate of interest, or even student loans at higher interest rates, it’s a smart financial choice to use a HEL or HELOC to pay off these debts. You could save hundreds, or even thousands of dollars, by paying off a high-interest debt through a home equity loan.
Is it beneficial to utilize the equity in your home to pay for an experience or invest in yourself?
More people these days are interested in experiences that produce memories that can last a lifetime than in buying more things. If you’ve always wanted to visit the Galapagos islands, climb Mt. Everest, or visit the great museums of Europe, you could put the equity in your home to good use and pay for these unforgettable experiences. With low-interest rates on home equity loans forecast for the next year, it’s much more affordable to use a home equity loan to pay for these experiences than it is to charge them on a high-interest credit card.
Home equity loans are secured by the equity in your home, so you should consider these loans carefully before you take this step. By working with a qualified home mortgage and home equity loan professional, you can decide which amount you would like to borrow, and which loan programs are best for you.