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How the average person can save money quickly and easily

Best Home Equity Loan Strategies

he-1A home equity loan can be your best bet whenever you find yourself in a financial crunch. However, the financial crisis proved more than a few things about consumer spending habits. One of its major lessons is that the majority of home equity borrowers spent their lines of credit in wasteful or haphazard ways, buying new expensive cars, vacations and even jewelry.

The benefits can be huge, with cheap closing costs and quick access to money, but using the best home equity loan strategies is key to successful financial planning. While second loans as home equity lines are often called, may often get homeowners into serious financial trouble, there are also choices that can be helpful.

Home Renovations

Using your line of credit for a home improvement project can be a win-win situation. Not only will you enjoy better living everyday, but at the same time contribute towards a higher resale value of your home. However, not all home improvement projects add to the resale value. Remodeling a kitchen with new cabinets, counter tops and flooring may attract buyers, and return a higher home sale price.

A shiny new remodeled bathroom is the second highest rated room in a home to attract buyers behind a kitchen. But the cost of remodeling a basement could be lost. Some other allocations can also be tough to regain at the time a home is sold, including the purchase of a swimming pool.

Retirement Savings

Saving for retirement may seem difficult with the higher costs of groceries, utilities and other expenses. Using a home equity line for retirement can be dangerous, considering most require repayment after a limited number of years. Paying off a home before retiring is always the best option, and paying off any additional home equity lines. If the home is larger than you need or too much to afford, perhaps selling it and moving into a smaller less expesnive he-2home or to another region could be perfect options.

Debt Consolidation

If creditors are calling on unpaid debts, credit consolidation may be a smart choice with funds from a home equity loan. Figure out the number of unpaid credit card bills you have, their balances and reasonable settlements. Then you may want to hire a debt consolidation agency to work out the best deal. Paying off delinquent credit cards is much better than having to make monthly payments, which incur huge interest rate charges.

Medical Expenses or Education Bills

If you have high medical bills or outstanding student loans, using home equity to pay them off may be a good option. Using equity to pay educational expenses is also a great way to help your financial situation improve, including better scores on your credit reports. Many credit collection agencies are willing to reduce the amount owed if a payment can be made in full to pay off accounts, including student loans.

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