Atlantic Blog

The seasons change, the tides shift, and home values continue to trend upward. There are obvious exceptions to the pattern, like the housing crisis of 2007-2008, but the median house price has risen almost continuously from decade to decade. There is a drastic difference just going back a few decades. In 1994, the median house price in America was around $100,000, and as of February 2024, it is now $400,000 (PK). Just twelve years ago, the median was only $170,000! No one knows for certain where it will go next. It's harder than ever to break into the housing market for the first time, but if you already own a home and aren't interested in moving, this upward trend can be your friend. 

As your home's value increases, so does your available equity. This current trend allows homeowners to leverage their home's equity to achieve financial goals and build a brighter future. It's important when pursuing your financial goals to take advantage of all the tools at your disposal. The two most common ways to access your home's equity are through a Home Equity Loan or a Home Equity Line of Credit, also referred to as a HELOC. Since both are secured loans, using your house as collateral, they typically offer more favorable rates and terms than unsecured loans, such as credit cards or personal loans.  

How can you use your home's equity to improve your financial well-being? We have a few ideas that might get you brainstorming!

#1: Renovation time?

The house I grew up in was well over 200 years old, and there was always some type of construction happening throughout the years—from putting in brand new floors ourselves to building a second shower from scratch. You don't have to be DIY experts (or foolishly brave) like my parents, but making improvements to your house not only makes you happier but also improves the property value. 

Instead of pulling from high-yielding investment accounts or resorting to high-interest loans or credit cards, consider tapping into your home's equity to finance your projects. Stop putting off those repairs for next year and use your home's equity to invest in the place you sleep at night. 

#2: CONSOLIDATE THAT DEBT! 

Look, the weight of debt can be crushing, but there are tools you can use to make it more manageable, like consolidating your debt using a home equity loan or HELOC. 

Combining multiple loans or credit card balances into one loan leaves you with a single, more manageable payment. You're also likely to lock in a much lower interest rate – providing you with immediate savings. Imagine having to worry about one monthly payment with a better interest rate instead of juggling multiple lines of debt - you'll have a much easier time paying it off, and soon, you'll be able to taste delicious financial freedom (and we've heard it tastes really good). 

#3: Educate Yourself 

Education will always be important; we should never stop learning new things, but education isn’t always cheap. Sure you can load up a YouTube video and get a crash course on most subjects, but if you want to get a degree or expand your formal education, it’s going to cost you!

Use your home's equity to fund expenses to pursue higher education without the stress of financial strain. Want to go back to college? Your house can help. Using a home equity loan or HELOC to finance tuition or other learning expenses ensures that you and your family have access to the education they need to succeed. 

#4: Vacation Time

Kick your feet up, sip a cold drink, and relax. Do it for all of us. Everyone needs some time off, a little r&r, when's the last time you actually went on a vacation? They can be expensive so when funds are tight it's easy to stay home or avoid seeing all the world has to offer. 

Use your home's equity to fund your family's dream vacation without putting yourself in a financial hole. It's important when planning to strike a safe balance between responsibility and indulgence. No vacation is worth putting yourself in insurmountable debt. Treat yourself responsibly. 

#5: All of Life's Milestones

Are you getting married or celebrating the birth of a child? Maybe you're going through another one of life's important milestones, and the hefty price tag overshadows what should be a celebration.

By utilizing your home's equity, you can finance these milestones without sacrificing your financial well-being. Just remember to budget wisely and plan ahead - you want to remember how amazing the moment was, not how much it cost you. 

#6: Expect the Unexpected 

No one likes to think about unexpected expenses, but they're one of life's inevitabilities. Sometimes, life's emergencies are bigger than our emergency funds – that's when a home equity loan or line of credit can step in to save the day. Whether it's a medical emergency or a sudden home repair, accessing your home's equity can provide much-needed financial relief in hard times. You shouldn't feel shame for needing help in the event of an emergency. Taking proactive steps can help protect you from a lengthy recovery process. 

Don't have an emergency fund? Our blog - Be Prepared, Not Scared: The Power of an Emergency Fund, can help you get started. 

#7: Whatever the Future Holds

Are you looking to start your own business? Thinking of getting a vacation property up north? Whatever the future holds, your home's equity could be the perfect source of funding to make your dreams a reality. With lower interest rates than most other financing options, you'll be able to accomplish your goals without incurring high-interest debt or excessive borrowing costs. 

Just remember to approach every big financial step with a concrete action plan and solid risk assessment. 

We're Here to Help!

Your home is more than just a place to live - it's a valuable asset that can help you achieve many of your financial goals. Take advantage of the funding it can provide by safely leveraging your home's equity and unlock a world of possibilities. 

If you want to learn more about our home equity products or would like to determine how much equity is available in your property, we're ready to help. Contact a Mortgage Loan Originator at 800-834-0432 to get started.

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Source:

PK. "Historical US Home Prices: Monthly Median from 1953-2024." DQYDJ, 7 Jan. 2024

Each individual’s financial situation is unique and readers are encouraged to contact the Credit Union when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.