Home equity: When to take out a home equity loan

by Barbara Rybicki 10/23/2023

Home equity loans are term loans that are taken out against the value of your home already paid or the amount of the home owned. For example, homeowners who have paid 25% of their full outstanding loan balance, say $50,000 of a $200,000 mortgage, have that much equity in their home or how much of their home they actually own.

While understanding the basics is imperative for applying for a home equity loan, knowing when to apply for one is just as important.

Here’s a quick guide to the top three reasons most homeowners take out a home equity loan:

Home repairs

Home improvement projects can be taxing on both the homeowner and the homeowner’s budget. However, if the repair is one that will add value to your home, looking into a home equity loan may be a decent option.

This is usually a great way to reinvest your home equity back into your home, especially if you’ve already paid a significant portion of your mortgage’s outstanding balance.

Debt consolidation

For those attempting to defeat high-interest rates and consolidate their credit, utilizing your home’s equity could be another excellent way to manage your financial situation. Many who have adapted to this type of refinancing have found that taking out a low-interest, term-based loan like a home equity loan helped them regain their financial standing.

By using a home equity loan, they’ve managed to reduce their monthly payments in other financial areas and regained their monthly budgets.

Life expenses

Sometimes life happens. It can also happen in a way that’s more expensive than expected or just as costly as anticipated. Regardless of whether you’re paying for a ceremony, helping with a college tuition or simply need the extra money for an unexpected circumstance, a home equity loan can help you manage your expenses.

Just as with debt consolidation or home improvement, applying for a home equity loan during your more expensive life events can help you keep the payments manageable without over stressing you or your wallet.

Home equity loans are excellent ways to make your home and monthly mortgage payments work for you.

If you find yourself wanting to reinvest in your home or simply need an extra bit of assistance, reach out to a lender of your choosing and ask what options they have available for you. They have formulas and methods that can calculate home equity loan rates based on your specific needs and circumstances.

Finances

Home Equity Line Of Credit

Home Equity Loans

Home Improvement

Home Loans

About the Author

Barbara Rybicki

I am originally from Poland but have been a Grafton resident for almost thirty years.

I come from the Hospitality Business. I used to work in 5 Star Marriott Hotel Management. That experience taught me how to provide excellent customer service. That "Marriott" way of doing business instilled in me over the years helps me tremendously to succeed as a local real estate broker.

Nothing is more exciting to me than gratifying feeling I get from helping people reach their real estate needs and dreams. You can count on me to always do what is in your best interest. I will be there for you throughout the entire transaction making sure you understand each step of the buying or selling process. I will guide you with great communication skills and hard work ethic.

I have not only passion for my job but also extensive real estate expertise. Whether it is preparing and staging your home to sell for top dollar or helping you purchase a perfect home, feel free to reach out to me so we can start this process together.

I specialize in marketing and selling residential real estate in Grafton, Upton, Northborough, Westborough, Southborough, Shrewsbury, Milford, Hopkinton and Metro West area.