According to the St. Louis Federal Reserve, homeowners currently have about $30 trillion in home equity due to rising housing prices, just shy of the peak in 2022.

The amount most lenders will allow you to withdraw from your equity while still leaving 20% equity in the home as a safety net equals about $200,000 in cash per homeowner (which is the maximum you can get).

What’s the most effective way to profit from your home’s equity?

Opting for a home equity loan can be a strategic financial move, especially when faced with significant expenses like major home repairs or the need to consolidate high-interest debt. It allows you to leverage the value you’ve built in your home over time, which can be particularly advantageous as it often comes with lower interest rates than other borrowing options.

By tapping into your home’s equity, you’re essentially putting your property to work for you. This type of loan provides a lump sum amount, giving you the flexibility to address pressing financial needs efficiently.

When considering a home equity loan, assessing your financial needs and circumstances is crucial to determine the best option. If you have a one-time expense, such as a home renovation or debt consolidation, a traditional home equity loan with a fixed interest rate may be the most suitable choice, providing you a lump sum upfront.

On the other hand, if you anticipate ongoing expenses or uncertain financial needs, a home equity line of credit (HELOC) could be more advantageous. It functions like a credit card with a revolving credit limit, offering flexibility to borrow as needed while only paying interest on the amount used.

Before applying for a home equity loan, applicants should thoroughly grasp all the risks and weigh them against the benefits. (Remember, in some severe cases, defaulting on a home equity loan may result in the loss of your home.)

If you’re uncertain about what’s best for you, consider consulting a trusted financial advisor. We can help you assess the entire scope of your needs and develop a plan and solution together.

To get started, schedule a 15-minute consultation by contacting 330 836 7800 EXT. 1 or selecting a convenient time on my online calendar >>here.<<