Have a dream that needs a little funding? Consider a home equity loan to fund your plan.
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Home equity loans allow you to borrow against the value of your home. In other words, they act as a second mortgage. Like with any loans, there is risk involved. Going further in debt and accruing fees is part of the deal, but there are benefits that make them worthwhile and a great option for the right project.
Good to Know about Home Equity Loans …
Often, because you are using your home as collateral, home equity loans can be easier to qualify for, and they can be for large amounts of money. Additionally, interest on these loans are tax-deductible to a certain extent.
You can receive your loan two ways: (1) in a lump sum up front that you repay in monthly payments or (2) as a home equity line of credit (HELOC). A HELOC doesn’t give you a lump sum; rather, it allows you a maximum amount to borrow from whenever you want, much like a credit card. You can borrow any amount within the maximum, and you can borrow as many times as you like. For HELOCs, you’re required to make interest payments during the period in which you borrow money, and after your borrowing period is up, you must start repaying the remaining principal and its interest.
Choosing which loan is right for you depends on how you plan to use it. Regardless of what you pick, we’ve curated four creative ways you can use your home equity loan to make a difference in your life.
Great Ideas for Home Equity Loans
1. Pay off student debt.
College graduates sans student debt are rare. If you’re sick of your student loans hanging over your head, why not solve the problem? If you have a home, you have an asset — treat it like one. With a home equity loan, you’re doing just that.
2. Start a business.
A home equity loan could change your life’s trajectory, especially if you’re an entrepreneurial spirit. Is there something you’re passionate about that others would be, too? Are you ready to start something fresh and take life into your own hands? A home equity loan could give you the push you need to get your idea up and running.
3. Update your home.
If you’re thinking of moving into a better space, think again — this time, with a home equity loan in mind. Your home is your home, potentially filled with a lifetime of memories. Instead of moving, make adjustments to your house to make it more livable. If it’s too small, build an addition. If it’s outdated, remodel the bathrooms. If you want to see from one end of the house to the other, knock down some walls to open up your floorplan. There are countless ways you can make your home work better for you now and for years to come. You may discover that your “old” home is the perfect place for your future.
4. Travel, travel, travel.
If you have the time but not the money, a home equity loan can get you where you want to go. As life gets busier, the chances you have to travel become fewer and farther between. If it’s important for you to see the world and immerse yourself in different cultures, why not do it when you can?
Remember — a loan is only a sound option if you have the means to pay it back in a timely manner, without accruing unnecessary interest. Practicing good budgeting and financial habits to keep you on track for a sound financial future.
For more on services regarding home equity loans offered at Landmark Bank, visit https://www.landmarkbank.com/personal-banking/home-lending/home-equity-loans.