Best Uses for Your Home Equity Line of Credit


Home equity loans or home equity lines of credit (HELOCs) are great financial tools but like any other tools, they must be used properly. You need to think carefully about what you use your HELOC for - using it for a dream vacation to Greece is not a good idea. And of course, you don’t ever want to borrow too much, be unable to make the monthly payments and risk losing your home which is used as collateral.

Following are the best ways to use a HELOC:

  • Remodeling your home is the most common way people use home equity.  Just be careful not to borrow more than you need. Don’t go crazy and install marble floors in your closets just because you have access to lots of cash. Be practical and try to make improvements to your home that are smart investments and will pay off when you go to sell it.
  • Consolidating debt from several credit cards. Using a HELOC to pay off the debt on several cards makes managing your debt much easier. Instead of several different due dates, interest rates and amounts, you’ll have just one of each and chances are the monthly payment will be much smaller.
  • Financing a college education is also a popular use for home equity.  With rates that are typically lower than student loans, using your home as collateral can provide both lower payments and cost savings.
  • Paying off credit card debt that carries a high interest rate. Usually a HELOC will have a lower interest rate and typically the interest you pay on this is tax-deductible; the interest on your credit card is not. This makes good financial sense as long as you don’t continue to use the credit card and run up another big bill.
  • Financial hardship or emergencies caused by, for example, unemployment or a health issue. The smart move is to get approved for the loan before you find yourself in trouble so you can access the cash you need quickly. Lots of people get approved for HELOCs but don’t borrow against it until they really need it. If you’ve chosen a good lender (like Hanscom FCU!), there should be no application or annual fees so having the loan ready won’t cost you a thing.

Your primary goal with a HELOC, in addition to using it wisely, is to keep your home and finances safe. Be practical and don’t treat it like it’s winnings from a lottery. Remember that your home, likely your most valuable possession, is at stake.

Learn more about home equity by downloading our free Equity Edge eBook.  This eBook will introduce you to current remodeling trends, affordability, and includes tip sheets on going green and quick home improvement projects to spruce up your home in a pinch.

Use Home Equity Wisely

Hanscom FCU’s 3 in 1 Home Equity Advantage Plan combines the convenience of an equity line of credit, with options for fixed rate advances and a credit card. There are no application fees, no minimum draw requirements, and no closing costs.*

expert guidance

Our home equity and mortgage experts are happy to answer your questions and help you understand your available options. We understand your unique financial needs and have the tools and expertise to help you achieve your goals. Let our dedicated home equity team find the perfect solution to make your financial dreams a reality.

Learn more at

* If you terminate your line within the first 24 months after closing, you will be responsible for closing costs.


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About Author

Bill Burpeau
Bill Burpeau

Bill Burpeau is a relationship manager at Hanscom FCU. As a Credit Union Certified Financial Counselor, he is an enthusiastic advocate of financial literacy and education. He constantly studies and is up to date with the latest financial management concepts and technology. Bill is a graduate of Texas A&M University with a BBA in Business Management and served in the U.S. Navy as a Supply Officer.

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