Dec 28, 2018 / Home Equity
The holidays are nearly over – the most expensive season of all. The food, the parties, the presents – they make the season special. But they don’t always come cheap. If you’re wondering about the best way to afford this year’s holiday expenses, a home equity line of credit may be a good option for you.
As home values have climbed in recent years, interest rates have remained relatively low. And that means borrowing money against your home can be an affordable option to pay for just about anything, including holiday expenses. But it’s important to use your home’s equity wisely and have a plan to pay off your loans. With a home equity line of credit (HELOC), you can tap into your home’s available equity (your home’s value minus what you owe) to pay for home upgrades, a vacation to someplace warm, or run-of-the-mill holiday expenses. And because a home equity line of credit acts like a credit card, you can use as much or as little of the loan as you want.
Credit cards can be a great way to pay for holiday expenses, especially if you have one that rewards you for your purchases. But if you have multiple credit card balances, sometimes the best holiday gift of all is to consolidate that debt and get a lower interest rate. There are several ways to do this. First, you could find a new credit card with a low fixed rate and a cash back reward for transferring other credit card balances over. Or, you could consolidate your debts through a home equity line of credit. Doing so may give you a lower interest rate, which means more available money every month to pay off your debt sooner.
Because a HELOC uses your home as collateral for money borrowed, it’s usually best to spend the money in a way that will improve the value of your home. This year, consider the gift of home improvement. Especially if you plan to sell your house eventually, make upgrades that will allow you to recoup the highest amount of your investment as possible.
Many people aren’t aware that a home equity line of credit can be used for seemingly smaller things like buying holiday gifts and travel. As long as you use your loan wisely and have a plan to pay back the money borrowed, this can be a convenient and relatively inexpensive way to get through the holidays.
The holidays might be the most expensive season of all, but your home’s equity, used wisely, can be a great way to afford those holiday costs. A home equity line of credit from Utah First is fast, flexible, and hassle-free. Learn more about whether a home equity line of credit is right for you.
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