3 Reasons to Get a Home Equity Loan and Improve Your Financial Fitness

Have you ever been having an intense discussion with somebody and said something only to immediately realize you were in trouble?  It wasn’t what you said that put you into the doghouse, but the way you chose to string your words together. 

You face a similar challenge when deciding whether or not to get a home equity loan because if your reasons aren’t sound it will find up costing you in the long run.  You may not wind up in the doghouse for refinancing for the wrong reasons, but you could land in the poorhouse.  I want to help save you from making a potentially costly mistake, so here are 3 good reasons to get a home equity loan.

1.  Rates are low – Low interest rates are a compelling reason to get a home equity loan because they’re going to play an integral role in determining what your new house payment is likely to be.  Before deciding to move forward based on low rates, make sure you’ve done your homework.  Low rates could wind up costing you more in the long run if the total cost of the loan skyrockets when you factor in some of the fees that can be included in many home equity loans.  If the total cost of borrowing saves you money, you should move forward if the numbers tell you it’s a smart decision.

2.  Consolidate debts – The ability to consolidate debts is one of the main reasons people decide to move forward with a home equity loan, but simple consolidation alone isn’t a compelling enough reason to do it.  If you’re planning to consolidate other debts with a home equity loan, play your cards right and make a smart decision.  If you’re using loan funds to pay off some kind of consumer debt, such as a revolving credit account, take it to the next level by closing the account when it’s paid off. 

It doesn’t matter whether it’s a computer company financing account or one of several credit cards filling your wallet, prove to yourself that you’re serious about forever improving your financial situation by closing the account.  Your house isn’t a gift that can keep on giving.  Your equity is like an oil well.  It can run dry and the closer you get to scraping bottom the more it’s going to cost you.  Learning to tell yourself “no” to impulse purchases and taking away the means to make them is one of the best ways to practice tough love – on yourself.

3.  You can blend two or more mortgages into one – You might just get to smile all the way to the bank if you’re able to combine two or more mortgages into one when getting a home equity loan.  If you can combine these smaller junior mortgages into a single payment you can save money, too.  Combine this strategy with two listed above for an easy 3 step process to vastly improved financial health.

Of the three reasons listed above, which is the most compelling for you to get a home equity loan?  Tell me why because I like to keep my finger on the pulse of what makes you tick.

Need to unlock your home's equity - but have a few questions? Why not consider a free private email consultation with me, Darrin Roseborsky? There's no obligation or commitments to worry about. Just helpful answers to your questions. Use the short form in the top-right corner to get started. And in a few minutes, you'll have the answers to all of your questions.