Lamacchia Realty
Sandra Perry, Lamacchia RealtyPhone: (978) 273-0601
Email: [email protected]

Home equity: When to take out a home equity loan

by Sandra Perry 03/20/2023

Home equity loans are term loans that are taken out against the value of your home already paid or the amount of the home owned. For example, homeowners who have paid 25% of their full outstanding loan balance, say $50,000 of a $200,000 mortgage, have that much equity in their home or how much of their home they actually own.

While understanding the basics is imperative for applying for a home equity loan, knowing when to apply for one is just as important.

Here’s a quick guide to the top three reasons most homeowners take out a home equity loan:

Home repairs

Home improvement projects can be taxing on both the homeowner and the homeowner’s budget. However, if the repair is one that will add value to your home, looking into a home equity loan may be a decent option.

This is usually a great way to reinvest your home equity back into your home, especially if you’ve already paid a significant portion of your mortgage’s outstanding balance.

Debt consolidation

For those attempting to defeat high-interest rates and consolidate their credit, utilizing your home’s equity could be another excellent way to manage your financial situation. Many who have adapted to this type of refinancing have found that taking out a low-interest, term-based loan like a home equity loan helped them regain their financial standing.

By using a home equity loan, they’ve managed to reduce their monthly payments in other financial areas and regained their monthly budgets.

Life expenses

Sometimes life happens. It can also happen in a way that’s more expensive than expected or just as costly as anticipated. Regardless of whether you’re paying for a ceremony, helping with a college tuition or simply need the extra money for an unexpected circumstance, a home equity loan can help you manage your expenses.

Just as with debt consolidation or home improvement, applying for a home equity loan during your more expensive life events can help you keep the payments manageable without over stressing you or your wallet.

Home equity loans are excellent ways to make your home and monthly mortgage payments work for you.

If you find yourself wanting to reinvest in your home or simply need an extra bit of assistance, reach out to a lender of your choosing and ask what options they have available for you. They have formulas and methods that can calculate home equity loan rates based on your specific needs and circumstances.

About the Author

Sandra Perry

Welcome! My name is Sandra Perry, I am honest, professional and energetic. I will put my skills to work for you, and you will reach your goals.

I am a lifelong resident of Massachusetts, I grew up in Lowell. I bought my first home in Dracut in 1993 and that is where I currently reside with my family.

My work experience is predominantly in the field of finance and management beginning with the loan servicing department at Union National Bank working with Mortgages, Escrow Accounts, Insurances and Accounts Receivables Department. I also started my own childcare business (Busy Bears Preschool) successfully serving local families for 23 years.

I volunteer at several local nonprofits here in my hometown and find it very fulfilling to serve my community. I served as one of the Co-Coordinators for End 68 Hours of Hunger in Dracut and was on the Board of Directors as the Secretary for Dracut Volunteers Inc.

I look forward to working with you.