What Is a Good Use of a Home Equity Line of Credit?
A home equity line of credit can be used for a variety of reasons, including debt consolidations and home improvements. Discover how home equity lines of credit can be used to pay off student loans with help from a financial specialist in this free video on home loans and money management.
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Hi, this is Matt McKillen with Innovative Financial Group. I've been asked today what is a good use of a home equity line of credit? A home equity line of credit can be used for a variety of purposes. Generally the first priority that people do with their home equity line of credit is to consolidate all their debts. And these would be non-tax deductible debts or higher rate debts like credit cards, personal loans, auto loans is another good example. And sometimes by consolidating all those loans into one home equity loan payment, a lot of my customers are able to save anywhere from 3, 4, 5, sometimes up to 8 or 900 dollars a month in monthly payments. And it's a lot easy to manage and pay your debt down faster if you're only paying on one loan. Another good reason for a home equity line of credit is to do home improvements. If you're thinking about putting a pool in or if you're thinking about doing an addition or if your home needs repairs like a new roof or a new upgraded plumbing, whatever it may be, or remodeled kitchen. Using the home equity line is basically allowing the home's equity to help increase the value of the property. One last good use, another example, would be for educational expenses. Whether it be to pay off student loans or possibly to pay for future tuition going forward. All of these examples are ways to use, great ways to use a home equity line that are also tax deductible in most cases. Thank you for asking, my name is Matt McKillen with Innovative Financial Group.