How to use your home equity this summer

If you’re a homeowner, your home can be a helpful source of funding for any number of purposes. Thanks to something called that Home is equal, or values ​​you have created in your home. you can Tap on this equity Using products like Home equity loan And Home Equity Lines of Credit (HELOCs)Often at substantially lower rates than other funding sources.

While your home equity can help you any time of year, summer brings new opportunities from this valuable asset.

Find out how much you can borrow against your home equity here.

How to use your home equity this summer

Summer can be a great time to tap into your home equity. Here are three ways you can use it.

Repair or renovate the home

The warmer months are ideal for home improvements you may have put off, from fixing an old roof to adding some curb appeal. home repair And renovations are often the best use for a home equity loan or HELOC because they are May qualify for tax deduction.

“Interest on home equity loans and lines of credit is deductible only when the borrowed funds are used to purchase, construct, or substantially improve the taxpayer’s home that secures the loan.” The IRS States “the loan must be secured by the taxpayer’s principal home or second home (qualified residence) and meet other requirements.”

To check whether your home improvement plans qualify for this deduction, consult in person or through a tax professional. Tax filing site.

Explore current home equity rates online now

A vacation fund

If your summer plans include travel, you can use your home equity to cover the expenses. It is often much more affordable than other financing options, such as credit cards and personal loan.

Currently, credit card interest rates average around 20%, and personal loan rates range from 8% to 36%. on the contrary, Home equity loan rates About 7% and HELOC rates About 7.8% to 8%. This can save you a substantial amount of interest while paying back the money you borrow.

Buy a vacation home

If you regularly travel to a particular location and are tired of staying in hotels and short-term rentals, you may want to consider buying a vacation home. If so, tapping into your current home equity can help.

Using home equity funds to pay for a vacation home can allow you to make a larger down payment while lowering your interest rate on a new home mortgage. You can even earn passive income By renting out your vacation home when you’re not using it, it helps you get the most out of your loan and Wealth building For the future.

Bottom line

If you’re thinking about taking a vacation this summer or doing some extra projects around the house, drawing on your home equity can help you make those plans a reality. You can start by Calculating your home equityMake sure you visit Borrowing requirementsAnd here’s comparing home equity options.