What Can You Use a HELOC For
For those who own a home, a home equity line of credit (HELOC) can be a great option to fund a lot of things. With a HELOC, you can use the equity in your home to access money for almost anything, not just home renovations. You can consolidate debt, pay for educational expenses, and more. It's also a much more affordable option than things like credit cards, which usually have much higher interest rates. Even if you don't actively use your HELOC, you can also have it for emergencies, such as a flooded basement or medical expense.
Home Improvements and Major Home Repairs
Think remodeling your kitchen, making updates to your landscaping, or repairs due to a leaky pipe or a tree falling on your roof. A HELOC may help you to increase your home's value and turn your house into a home you love living in (and keep it that way). However, be aware that you might only make some of the money back you invest into your home (check out our article on projects that add the most value to your home). First, think about the projects that would be the most important to you and your family and research the associated costs. Then, you can weigh those costs against the resale value the project would add to your home if you sell it. This way, you can make sure the payoff will be worth it!
Student Loans and Educational Expenses
Whether you're paying for tuition, a tutor, or education-related expenses, you can use a HELOC to pay for them. Always consult your tax advisor before making a decision, as you may be able to take a tax deduction on interest paid from student loans.
Major Life Events
Some life events are just plain expensive. Whether you're getting married or having a baby, a HELOC can help fund these and other life events without draining your emergency fund and help keep your budget intact.
Medical Bills and Other Unexpected Expenses
We all know life happens. Expensive car repairs and medical bills are things we all experience at some point. Sometimes, it just isn't possible to prepare for those unexpected costs, and a HELOC can help get you through tough times. If you're considering having a HELOC available for emergencies double-check to see if there is a yearly fee for having a HELOC open. If they don't charge a yearly fee, you'll only owe money on your HELOC if you borrow from it.
Paying Off Debt or Consolidating Debt
If you have credit cards or loans that have high-interest rates, you can consolidate those debts to get a single monthly payment. Often, the interest rate on a HELOC is lower than credit cards and other loans, which will help you pay off debt much faster and pay less in interest.
WaFd Bank is Here to Help
When it comes to getting your finances in order for the ups and downs of life, a little planning goes a long way. Whether you're a seasoned budgeting pro or new to saving (check out WaFd Bank's account options while you're here), your local WaFd Bank branch is available to help you reach your financial goals. Open an account online, or visit your local branch or give us a call at 800-324-9375 to learn more and open an account today.
