For many of us, there are more than a number of improvements that we’ve wanted to make to our homes. Whether it’s fixing a leaky roof, renovating a kitchen or finally remodeling the guest bedroom, any home-related project can cost a fortune. Tapping into your home’s equity for much-needed improvements that add value to the property is an effort that can reap plenty of rewards later on. Let’s talk about a few other reasons why you should consider one of our home equity loans to help you out.
Don’t tackle your next home project or struggle with your child’s college tuition without some form of financial help. Our home equity loans can help you today!
Always keep in mind that if you’re thinking of tapping into your home’s equity to renovate a kitchen, bathroom or roof, it needs to be a project that will add value to the property. If you’re thinking about selling, there are very few improvement projects that will increase the value to cover the cost of building. Most projects have a 50¢ to 80¢ return on the dollar if it’s completed. Borrowing half the cost of the remodel and paying cash for the rest can keep you from paying more interest over the years.
Paying Off Debts
This is something to consider only if you’re very responsible and can pay off the balance quickly. Always keep in mind that tapping into your home’s equity to pay off bills and other high-rate debt can save you money only if done responsibly. For example, if you’re thinking of paying off a high-interest credit card bill, then a home equity loan with low interest can help.
Be cautious, though, because if you’re just coating an overspending problem with a home equity loan, it could leave you deeper in debt. Look into your budget and spending habits to fish out where money is going before deciding to take out a loan. If you’ve come to terms with splurging on un-needed things and can pay off the equity loan in three years or less, then it might be a great option for you. Either way, be sure to speak with us about it first.
If you’ve exhausted most of your retirement and savings funds, a home equity loan could be a great lifeline alternative. We’ve always recommended having an emergency fund to support you and your family for at least three months to help cover expenses in case an emergency arises. For most families, however, it may take much longer to come up with a financial safety net. Whether it’s for medical bills or a job loss emergency, a home equity loan can help supplement your finances while you get back on your feet.
Helping Your Kids Pay for College
While students do have access to federal student loans (some with low rates), a variety of repayment options and the possibility of forgiveness, navigating the student loan landscape can be tricky. Many parents opt for parent PLUS loans, which come with higher rates, no forgiveness and fewer repayment options. Home equity loans, on the other hand, are always a great alternative, especially when you have a fast repayment plan. Remember, if you can pay off a student loan in five years or less, a home equity loan with a fixed rate is a great alternative.
Helping You with Your Finances
Looking to the future for any sort of unforeseen financial emergency is a habit that we all should have. Fortunately for you, our credit union in Harlingen has plenty benefits and services that can help you be financially comfortable in case the unexpected happens. Contact us today to learn more!