JUNE IS NATIONAL HOMEOWNERSHIP MONTH 🏡🗝️
REASON #5 TO OWN A HOME, NOT RENT
YOUR HOME EQUITY GIVES YOU SOMETHING TO BORROW AGAINST IF NEEDED
As you build equity in your home, you’re doing more than just increasing your ownership stake. You’re also creating a potential financial resource that can be tapped when large or unexpected expenses arise. Your home equity can serve as a valuable source of funding during times when you may not have sufficient cash available. Common uses include covering a child’s college tuition, managing significant medical expenses, financing major home renovations or additions, or addressing other essential financial needs.
While it’s generally unwise to use your home’s equity for non-essential or frivolous purchases, utilizing it for necessary and meaningful expenses can be a smart financial strategy. A home equity loan offers a practical means of accessing this capital and comes with a number of potential advantages:
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Tax Advantages: The proceeds from a home equity loan are not classified as income, so they are not subject to income tax. Additionally, depending on how you use the loan, the interest you pay may be tax-deductible (consult a tax professional for guidance on your specific situation).
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Flexible Borrowing Limits: The amount you can borrow is primarily determined by the equity you’ve built in your home. Lenders will also consider factors such as your debt-to-income ratio and credit score, but generally, greater equity allows for larger loan amounts.
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Predictable Repayment: Home equity loans typically offer fixed interest rates and set repayment terms, providing predictable monthly payments that can help with budgeting and financial planning.
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Improved Credit Score: A home equity loan can help improve your credit score if managed correctly. Consistent, on-time payments toward the loan can demonstrate to lenders that you are a reliable borrower, improving your creditworthiness.
In short, responsibly using your home’s equity through a home equity loan can offer an accessible and cost-effective solution for managing life’s larger financial demands.
If you're a renter, who would like to make the transition from renter to homeowner, contact Nina Hollander with Coldwell Banker Realty.
I can help you turn your rent payments into mortgage payments!
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Originally published at www.GreatHomesInCharlotte.com
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