While you might be tempted to put the funds toward a tropical vacation or a shopping spree, keep in mind that you want to spend this money wisely.
Here are a few smart ways to spend that extra equity if you have a home loan or are refinancing your house.
Home Repairs
One useful idea here is to put the money back into the house. Maybe the bathroom plumbing is in need of an upgrade, or perhaps you want to add an extension on to the house.
Taking the loan and putting it toward home repairs can help you to build up even more equity in the house. Think about resale value when taking this approach, especially if you’re thinking of putting the house up for sale in the near future.
You don’t want to spend so much money that you can’t make the funds back in the sale. A few additional good ideas are replacing the roof, upgrading the HVAC system, installing new carpet, or fixing up your yard.
Anything that will give you a good return on your investment is a smart idea.
New Car
While you don’t necessarily want to waste your money on the flashiest car available today, having a stable vehicle is important.
When you’re constantly putting money into repairing your old car, the time has likely come to go shopping on the lot.
You can take the home equity loan and put the funds toward the purchase of a new car. Depending upon how much your loan is for and how much you want to spend on a vehicle, you might be able to eliminate the need for a monthly car payment.
Debt
Debt is a huge problem for many people. Whether you have credit card debt or student loan debt, this money that you owe might be preventing you from reaching other goals in life.
You can use your home equity loan to get rid of that debt for good. Make absolutely sure that the debt does not build back up again. If it does, your loan will have been for nothing.
Additionally, consider if the interest rate on your debt is high enough to make it worth it to use your home equity loan in this way.
other related articles of interest:
Bank Account Buffer
If you find that your bank account is constantly dipping below zero, you could put the money from the loan in the account as a buffer. By doing so, you don’t have to worry about running out of money for your daily expenses.
You must keep a close eye on the account, though. In the event that you use up all of your regular money and the loan, you will be in a difficult financial spot.
This type of loan provides you with a number of opportunities. Think carefully about which opportunity you want to pursue.
Image Credit: ways to spend a home equity loan by Pixabay
end of post … please share it!
end of post idea for home improvement
view and analyze home improvement ideas at our LetsRenovate center
Helpful article? Leave us a quick comment below.
And please give this article a rating and/or share it within your social networks.
