Once you’re a homeowner, the payoff can be great. When you make a mortgage payment each month, you build equity in a place of your own. As the equity in your home grows, your financial flexibility also increases. Think of it as an extra source of financing for when the unexpected happens.
An added benefit of borrowing money against the equity in your home, is it usually comes with a lower interest rate than other forms of credit, such as consumer loans, lines of credit and credit cards.
Here are some ways you can use the equity in your home:
- Pay off other debts with higher interest rates (like credit card debt)
- Renovate or repair your home – build a new room or put in a swimming pool
- For important life events – a wedding, dream vacation or university tuition
- Purchase a second home or vacation property
- Emergencies – like a serious illness
- Banks, credit unions and mortgage companies lend money to home buyers. This loan is called a mortgage. Your lender will ask you to fill out a loan application form that includes information about your income, employment and debts, and will use this information to determine your eligibility for a mortgage.…