Home Equity & Financial Planning

Your home is probably your biggest asset. If used wisely, home equity can be an integral part of your lifetime financial plan.

New Homebuyers

If you’ve just bought your first home, you’ve taken a big first step to building home equity that can be an important part of your financial plan later in life. As you pay down your mortgage, you are not only working toward owning your own home, but you are also creating a valuable asset that can help you achieve your financial goals as you build your home equity. For instance, you may have just moved into your new home, and, for the most part, it’s perfect for you. However, you may want to remodel the somewhat outdated kitchen in the near future. By paying down your mortgage, you will eventually be able to access home equity loans with low interest rates to fund this renovation.

Long-Time Homeowners

For those who have been living in their homes for quite a while and have accumulated considerable equity, you might consider converting some of that equity into cash to expand your financial opportunities. For example, you might be a parent who is about to send a child to college. Home equity loans can provide a low-interest source of cash to help pay for your child’s education costs. You might also consider a HELOC if the expenses are indefinite and ongoing.

Retirement-Age Homeowners

Often, homeowners in retirement find that their pension or savings are not enough to provide the standard of living to which they’ve grown accustomed. To help supplement your retirement income, you can take out a home equity loan. Many homeowners have paid off their homes in full by the time they reach retirement age, which makes a home an extremely valuable asset. Until you’re ready to sell your home and move into a smaller place, you can unleash some of the equity you have in your home to pay for travel and other retirement living expenses.