How to Build Wealth With Refinancing and Home Equity Lines of Credit

Watch on your mobile device >>

You’ve probably already read through my previous article in this series of ways to make your house pay you back, so with article number three I wanted to share how you can gain extra wealth via your home using two tried and true systems that have been put in place to help homeowners; refinancing and home equity lines of credit. By following this advice, if applicable to you, you can end up with a sizable amount of extra income in your pocket – all as a bonus “gift” from your home.

Refinancing; Extra Disposable Income and More

Who doesn’t need extra income these days? With a myriad of things out there for us that must be done, whether paying off hefty credit card bills, going on a much needed and long-awaited vacation or paying for a child’s college education – the kind of liquid assets that are needed are simply impossible to come by for many people these days. But homeowners have the distinct advantage of being able to tap into their homes through the process of refinancing.

Through a series of steps followed with your bank or lender, you can apply for a refinancing loan. Property owners who opt for refinancing usually seek one or more of several benefits:

• Liquidating equity into cash
• Reducing interest costs
• Moving from one type of loan to another (fixed rate vs. adjustable)
• Reducing monthly payments by extending the current loan period

Essentially, the hidden immediate security in your home’s equity – aside from the obvious – lies in the ability to help you eliminate debt, pay down bills at a lower rate than a conventional loan might cost you, avoid having to tap into further credit card debt and more.


Tapping Into Your “Under The Surface Savings”

When buyers seek a Home Equity Line of Credit (HELOC), they are essentially drawing funds from the bank against the equity of their homes. For example, if you paid $200,000 toward your home five years ago and the property’s value has gone up to $275,000 in that time – you have gained the financial advantage of as much as $75,000. Here are a few ways in which the opportunities of a HELOC can benefit homeowners:

• Home Equity Lines of Credit are tax deductible, making the income on a property’s equity far more beneficial than from a regular loan.
• Using this wealth, many property owners opt to reinvest the funds into different properties, therefore yielding a passive source income via investment properties.
• For senior citizens who are 62 years old and older and have completely paid off mortgages, the opportunity to obtain a reverse mortgage allows them the financial freedom to obtain one lump sum or multiples payments, against the home’s equity.

Regardless of what your needs or desires are, knowing that if you need it you CAN access a sizable amount of wealth through the equity of your home is a very comforting feeling. Not only does it provide peace of mind to property owners of all walks of life, but it also makes for business-savvy and pragmatic use of one’s greatest hidden assets – the home.