If you are a home owner and have been paying your mortgage faithfully for awhile, chances are you may have some decent home equity accumulated. And if your home has appreciated in value, you could have quite a bit more than you realize. How should you use this equity, if at all? Renovating your home is one of the best ways to use your home equity to your advantage. Not only are you improving your home for yourself by replacing an old roof or adding on a room, but you probably are adding value to your home as well. Another idea is to tap into your home’s equity in order to set aside an emergency fund. The most efficient way to do this is to take out a line of credit against a portion of the equity in your home.
- One good way to create a decent emergency fund is to apply for a line of equity credit.
- Not only will you have emergency funds, nut as long as it remains unused it will not accrue interest or require payments.
- Of you have sufficient equity in your home to tap into, you may want to use it to pay off debts or finance your education.
“Buyers today often put the most emphasis on the kitchen, making it the one area that offers the largest return. You don’t even have to make major renovations in order to get a return on your investment. Small changes, such as new flooring or re-facing the cabinets can have a dramatic effect on your investment.”