Skip to main content
Hometap home
Financial Goals

You Can Use Your Home Equity to Do…That?

3 min read
"Header Image family playing on couch"
picture of author, Hometap TeamBy Hometap Team on March 11, 2019

Buying a home has its obvious rewards. Maybe less obvious are the myriad ways to tap into the equity you’ve built to fund your goals.

There are essentially two ways to tap into your equity: borrowing or sharing.

Homeowners can borrow against their equity via a home equity loan or a home equity line of credit (HELOC). However, these financing options do have a few drawbacks. For starters, both include the obligation to pay back the amount borrowed with interest and other fees.

Alternatively, equity sharing, or equity investing, like a Hometap Home Equity Investment, provides homeowners the flexibility to invest their wealth in more areas of their lives—not just in their homes. Hometap Investments offer no monthly payments, and no interest.

Find out what homeowners’ biggest financial goals are for 2022 in our free Homeowner Report.

Whether you opt for a home equity loan, HELOC, or Hometap Investment, here are four ways you can use that wealth to do what you really want.

1. Consolidate debt

Credit card debt weighs heavily on many Americans with average interest rates at 15%. That’s why a home equity loan with interest rates as low as 5% is so attractive. Use funds from your home equity loan to consolidate that credit card debt and significantly improve your financial posture.

Read 5 Tips for Consolidating Credit Card Debt >>

2. Pay for school

The cost of education has skyrocketed. But investing in your education or your children’s education provides lifelong returns. Private education loans may seem like a solid bet but they often have higher interest rates than a home equity loan. Plus, you can use your home equity funds to pay for college or offset the burden of student debt.

How to Use Your Home Equity to Get out of Student Loan Hell>>

3. Renovate your home

Build your dream kitchen. Renovate the unfinished basement. Add that party patio you’ve wanted. Home improvements are like a double rainbow. Not only do they provide instant gratification to the present homeowner but also that remodel can result in a profit when you sell, according to LendingTree.

4. Buy a second home

If you’re excited to add property to your portfolio, tapping into your home equity makes a lot of sense. Whether you’re considering a vacation home or investment property, home equity loans have lower rates comparatively to other types of loans like a second mortgage. As with any investment, you should familiarize yourself with the pros and cons of using your home equity to fund a second home.

What’s the Difference Between Financing a Vacation Home Versus an Investment Property?>>

Invest in You

Why wait to sell your home to access the equity you’ve earned? Accessing your home equity now allows you to invest in your present and future happiness, whether that’s achieving your financial goals faster or realizing a life goal that can also help improve your financial future.

Tap into your equity with no monthly payments. See if you prequalify for a Hometap investment in less than 30 seconds.

You should know

We do our best to make sure that the information in this post is as accurate as possible as of the date it is published, but things change quickly sometimes. Hometap does not endorse or monitor any linked websites. Individual situations differ, so consult your own finance, tax or legal professional to determine what makes sense for you.

Hometap is made up of a collaborative team of underwriters, investment managers, financial analysts, and—most importantly—homeowners—in the home financing field that understand the challenges that come with owning a home.

More in “Financial Goals”

home office with large windows overlooking city
Financial Goals

Understanding Which Home Improvements Are Tax-deductible

10 min read
modern kitchen with green cabinets
Financial Goals

Kitchen Design Trends to Consider for Your 2024 Renovation

8 min read
minimally decorated bright living room
Financial Goals

7 Brilliant Home Staging Tips from Staging Experts

7 min read