The holiday season can be a time of excitement and joy. It can also be a challenging time for homeowners struggling to make ends meet. Rising prices and financial commitments can make it difficult to find the funds to buy gifts or save for emergencies. However, a home equity line of credit (HELOC) can solve this problem.
With a HELOC, homeowners can access the funds they need immediately. This allows you to pay off the HELOC balance over a set period. This type of home equity loan offers flexibility and peace of mind during a season that can be stressful for many.
How a HELOC Can Help You Financially
With a HELOC, you can borrow a specific credit amount in one lump sum, repay what you owe, and then withdraw more money. This is why it’s ideal to use your HELOC for the holidays. Although your home becomes collateral when you use your HELOC, you can make low monthly payments until you pay off the balance. You can also use funds to pay bills or finance special occasions like weddings or graduation.
Several Resourceful Ways to Use Your HELOC
Homeowners can save funds by borrowing money to make numerous holiday purchases for themselves or their families. However, not everyone knows how to use a HELOC to their advantage. Continue reading for some ideas on spending a portion of your home equity.
Finance a Home Improvement Project
Borrowing from home equity can help finance renovations and repairs. Plus, it saves you the funds you would have to pay in cash for expensive costs that can leave you without money to spare. For example, kitchen or bathroom countertop replacements, landscaping, or other interior/exterior installations are common projects. These projects require special materials and professional labor, which can increase expenses.
Consider Debt Consolidation
Debt collectors are a hassle because they collect money until you pay your debt. Unfortunately, some people cannot make payments to remove high-impact delinquencies on their credit reports.
A HELOC can help speed up the process of consolidation by financing a settlement to close a delinquent account. Consider contacting a professional for advice about managing your finances while making regular payments to clear your debt.
Save for Financial Emergencies
Financial challenges can be tough to overcome, especially during the holidays. However, a HELOC can cover expensive costs and help you through a sudden financial crisis. Consider utilizing your HELOC for the transactions instead of using your cash on large purchases during special occasions.
Invest in a Family Vacation
You can use a portion of your HELOC to plan an exciting family vacation. While preparing to travel, create a payment schedule in advance for airfare, hotel rooms, gas, rest stops, or other costs. Also, put some funds aside for extra activities if you’re visiting a vacation spot, whether out of state or out of the country.
Partake in a Holiday Shopping Spree
Some purchases require a line of credit to make them or may cause shoppers to consider taking out a personal loan. Borrowing from your HELOC can be a reasonable option to pay expensive bills during a shopping spree. You may also consider only using a portion this year and another portion to finance more purchases next year. That may help you avoid overspending and exhausting your credit on only one trip.
Home equity is a reliable financing option for purchases without available cash. Therefore, if you still have not used your HELOC, consider borrowing a specific amount to maximize its benefits. Learn more about financial services at amerantbank.com and follow along with Amerant’s social channels on Facebook, X (formerly Twitter), Instagram, and LinkedIn @AmerantBank.
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