If you've owned your home for a while, you've probably built up some equity. That money is just sitting there. What if you could make it work for you? Here are five uses for your equity line:
1. Get a home equity line credit card. You can apply for a Visa or a MasterCard directly through your bank. Home equity line credit cards are just like regular credit cards except that the balance will show up on your equity line of credit balance. If you're currently paying a high interest rate [1] on your credit card, a home equity line credit card may have a lower APR. You can also get a home equity line checkbook.
2. Take out a low-interest secured loan to consolidate your debt. If you have a lot of unsecured, high-interest debt, you can save a fortune by taking out a single low-interest loan using your home equity as collateral. Take that money and pay off the costly debt. You'll be left with a single, easy-to-manage monthly bill.
3. Transfer money from your equity line of credit to your checking or savings account. If you need cash quickly, you can use the equity line instead of borrowing at a high interest rate. If you're getting a good return on your savings, you can increase your earnings by using your equity line of credit.
4. Use your home equity credit line to borrow money in an emergency. You can get your hands on a lot of cash quickly. The process is usually less time-consuming than a conventional bank loan.
5. Take advantage of tax breaks on equity lines of credit. Say you bought a car on credit and are making monthly payments. The interest on that debt is not tax-deductible. If you itemize your deduction, you can get a tax break on the interest you pay on an equity line of credit.