If you’re a homeowner looking to finance a big purchase or home renovation, look no further than a home equity line of credit.
A home equity line of credit (HELOC) is a great way to cover a variety of expenses to give you more flexibility with your finances. Below are four ways to use your HELOC from Lake Shore Savings Bank.
1. Home Renovation
Your home is one of your biggest investments, and like all investments, your home requires usual maintenance. Whether it’s a new roof or additional living space, one of the best ways to spend a HELOC is to increase the value of your home with improvements.
2. Tuition Expenses
With the cost of education rising, many homeowners choose to take on a HELOC to fund higher education. An investment in your education is an investment in your future, and a HELOC can help you afford it. Interest rates on HELOCs are usually lower than on student loans, so you will also end up paying less back in the long run.
3. Pay Off Debt
A HELOC can allow homeowners to consolidate debt to a lower interest rate than most credit cards or other lending options. According to Bankrate.com, at the end of 2018, the average interest rate for a HELOC was just under 6%, while credit cards averaged about 18%. With the home equity loan being secured by your home, lenders feel more comfortable offering low interest rates, making it easier to pay off your debt more quickly.
Some homeowners even use home equity to invest in other real estate or the stock market. Be sure to make investments where the return will either meet or exceed the cost of your HELOC.
While a HELOC is one of many choices to strengthen your finances, the most important things to remember are to not borrow more than you need and use your line of credit wisely. With all of our lending options available at Lake Shore Savings Bank, we’re here to be your partner in helping you find the best fit for you and your lifestyle. For more information on our current offers, visit our website or stop into any of your local branches.