If home values have risen in your neck of the Nutmeg state and you’ve built up equity in your house or condo, you may be tempted to take value out of your home to fund a renovation or other purchases you’ve been considering. A home equity line of credit (HELOC for short) can be a smart tool to free up cash – if it’s for an equally smart reason. Before you fill out the paperwork, you’ll need an objective opinion on whether you’re tapping into your home’s equity for all the right reasons. Here are three excellent ways a HELOC can help you make or save money, while also safeguarding your good financial standing:
HELOCs are tempting – after all, the loan rate is lower than conventional debt because the loan is secured by the value of your home, and the credit line means you can tap into funds as you need them. That’s why it’s extra important to ensure that you consider cash from a HELOC as a profit driver, not simply as an easy option for funding whims or wants.