I used to work as a loan officer for a major bank. One of my job duties was to answer questions that prospective borrowers had about the lending process, and I was constantly amazed by some of the inquiries I received. I couldn’t believe that so many people were misninformed about something as seemingly straightforward as borrowing money. For instance, I can’t even begin to tell you how many folks thought home equity loans could only be used for making improvements to the property. That is not the case at all. In fact, home equity loans are quite versatile and can be used for a variety of purposes. Here are some of the big ones.
Yes, structural and property improvements do top the list. After building a large enough line of credit by making several years’ worth of mortgage payments, many people choose to get a loan to do some remodeling or pay for some much-needed repairs. Redoing the plumbing or electricity, finishing the basement, or adding another bedroom are just a few of the projects home equity loans can pay for. Doing something like this can obviously increase the value of your property, and in that way can be viewed as a kind of investment.
But home equity loans can be used for so much more than just repairs. For instance, a significant number of parents turn to this kind of borrowing in order to fund their children’s college educations. With tuition costs skyrocketing seemingly every single year, it’s no wonder that parents too often discover that their meager savings won’t cover more than a few semesters at a private liberal arts school. Even when factoring in scholarships and government assistance, too many moms and dads find they need extra help to cover expenses. Borrowing against the amount of money they’ve already paid into their homes is a terrific way to make up for the shortfall.
Still other folks have used the cash from home equity loans to help purchase a new car, take a family vacation, or meet emergency business expenses. These might seem like frivolous uses to you, but they are all actually legitimate uses for this kind of loan. And in reality, provided that you qualify in the first place and show some means of being able to make the payments on time, no one can prevent you from using the money in any way you want.
If you foresee a major expense in your near future, maybe you should consider applying for a loan now. There are some very favorable rates on home equity loans available these days, so this would be a great time to take care of that remodeling project you've been putting off or pay down other, more expensive accounts. Apply online or in person today!
