Your Home Is an Asset You Can Borrow Against in the Future |
According to CoreLogic’s Equity Report, the average American household gained over $15,000 in equity over the course of the last year, largely due to home value increases.
As you pay your mortgage, you build equity in your home. With prices rising, the value of your home rises too, therefore building on the equity you have. The equity built in your home can be borrowed against in the form of a home equity loan or home equity line of credit. Simply put, a home equity loan is essentially a ‘second mortgage’ that uses your home as collateral as you borrow an exact amount of money.
As with any mortgage, if the loan is not paid off, the home could be sold to satisfy the remaining debt. One of the most attractive features of a home equity loan is that they come with low interest rates, allowing responsible homeowners to complete renovations, pay off high-interest credit cards, or consolidate other debts.
Many families chose to use the equity they have in their homes to put their children through college, invest in starting small businesses, pay off their mortgages sooner or move up to a home that better suits their needs. Invest now!