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The term "home equity" refers to the value of a home after the mortgage is subtracted. Once you've built up this amount, you have the option to take out a loan against it. This allows you to put that money to use by funding other projects. While there aren't any restrictions on how to utilize the funds, here are a few of the most popular options. 

3 Ways to Put Your Home Equity to Use

1. Home Upgrades

One of the most popular uses of home equity is property improvements, like renovations or home additions. Many changes can boost the value of a home. For instance, a garage door replacement can offer a return on investment of up to 98%. In such situations, the move ends up partially or fully paying for itself if you end up selling the property down the road. 

2. Consolidate High-Interest Debt

loanHigh-interest rates make it incredibly challenging to pay off certain lines of credit. Interest rates for home equity loans, on the other hand, are typically low. For that reason, it's a viable choice to help pay off financially-straining debts, like credit cards. You can utilize the money to consolidate multiple high-interest items so that you end up paying less money in the long run. 

3. Big-Ticket Purchases

The low-interest rates associated with home equity credit are also appealing when it comes to making large purchases. The interest payments are also often tax-deductible. As such, a homeowner may end up saving money using home equity to make big-ticket purchases. For example, you may end up with lower payments when purchasing a vehicle compared to taking out a standard car loan. The same sentiment applies to investment properties. 



Want to put your home equity to use? Turn to Estacado Federal Credit Union in Hobbs, NM, to learn about your options. Since 1953, the credit union has served the financial needs of residents across Lea County in New Mexico and Cochran, Gaines, and Yoakum counties in Texas. Apply for a home equity loan today online. Request personalized assistance by calling (575) 393-1596.

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