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3 Smart Ways to Use Your Home Equity Line of Credit (HELOC)

Last Updated

December 16, 2020

Written By

May Chiccino

When buying a home, one of the many benefits include acquiring equity over time on your big purchase. You home is an investment! The equity that builds up in your home can be yours to tap into for a variety of needs so you’re ready for anything. There are several ways to tap into your Home Equity Line of Credit (HELOC) to use it at its fullest potential based on the homebuyer’s personal preferences. Here are a few ways that you can start reaping the benefits of your line of credit. 


What is a Home Equity Line of Credit (HELOC)? 

Home equity is first acquired at the initial down payment on a mortgage. Equity is the difference between the amount owed on your mortgage and the current market value of the home. For example, if you owe $200,000 on your mortgage and your house is worth $250,000, the amount of equity that you have accumulated is $50,000. Your lender does not own a part of your property unless it is under a shared equity mortgage. Over time, a homeowner’s equity can increase as payments are made on the mortgage as well as the state of the current market. You can usually apply for a HELOC if you have at least 15-20% equity in your home and they are typically the cheapest type of loans because interest is only paid on the amount borrowed. 

3 Ways to Use your Home Equity Line of Credit (HELOC) 

If you are approved for a HELOC, lenders will extend you a line of credit for a fixed number of years. The way a homeowner uses their credit is individual to their needs. Here are 5 ways in which you can utilize home equity for large expenses. 

1. Consolidating Debt

Because interest rates on home equity lines of credit can be lower than other types of loans, consider consolidating your debt. By doing this, homeowners could simplify their payment and as a result, lower interest costs. If you pay the minimal requirements on your loans as you would on higher-rate debt, this could save you a chunk of money on interest. 

2. Improving your home

Putting money back into your home is one of the most common ways homeowners utilize their HELOC. Using the home’s value to increase the overall value by renovating rooms, adding onto the home, and more is a good choice for those who plan to sell their homes in the future at a higher asking price.  

3. Creating an emergency fund

Especially with the current state of the COVID-19 pandemic, life always comes with unexpected circumstances. Be prepared to tackle any problems that you face with a back-up or emergency fund. These funds can go towards things such as hospital bills, car expenses in the case of an accident, unemployment, and more. 

We’re Here to Help 

A home equity line of credit can be the right financial cushion to make sure you’re ready for anything. Contact one of our experts today to find out how you can qualify for a Home Equity Line of Credit and let’s roadmap the most strategic way to use these funds. 




May has been working at Family First for over 5 years. Having worked in various positions around the credit union, May has an exceptional understanding of both account operations and member service. Currently, May is a Financial Service representative as well as a Certified Financial Counselor. By creating customized plans around their unique needs, May’s ultimate goal is to help members achieve financial stability and success. Watching her members excel financially alongside her team is her favorite part of working at this organization.

Prior to working at Family First, May spent 15 years working for a local community nursing home, providing personalized care and treatment to her patients. She is a strong nurturer of her community and has proved this time and time again with her work at Family First.  

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