How Can a Home Equity Line of Credit Be Beneficial?
A home equity line of credit can be beneficial in that it can be used to pay off consumer debt, and it can be used to consolidate debt. Find out how home equity lines of credit can be used for home improvements with help from a financial specialist in this free video on home loans and money management.
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Hi this is Matt with Innovative Financial Group. I was asked a question today, how can home equity lines be beneficial to borrowers. The answer to this question is that, a home equity line can be used for a variety of purposes. One of the main purposes that people use their home equity lines is to pay off consumer debt. Most people's charge card rates can range anywhere from eight percent up to twenty-eight percent. And generally on a home equity line, especially in today's pricing, you can generally secure a loan rate of about three to four percent. So consolidating debt is one of the main beneficial reasons to use your home equity line of credit. Another reason to use it is also to do home improvements. Let's face it, your home is your castle, it's your investment for life. And if you use your home equity loan, which is tied to the property to help improve it's value like putting in a pool, or maybe putting an addition on the property. Not only are your allowing your home to pay for itself to increase it's value, but also there is a lot of tax deductions and interest write offs that you can acquire from a home equity loan, which you would not be able to do from a personal loan or credit card. Again my name is Matt McKillen and I'm with Innovative Financial Group.