5 Ways To Improve Cash Flow Using Home Equity

[Jun 11, 2010.]

 

If you are a home owner with equity stored in your property, you may be able to improve your monthly cash flow in less than 30 days. A new home equity loan can often be processed in just a few weeks. They are quick loans. Continue reading to see if one of these 5 ideas will work for you.

1. Consolidate High Interest Debts - Interest rates on credit cards can be very high and making only minimum payments can mean never paying the balance due in full. The Federal Reserve Board says 46% of American families are burdened by debt. The average debt is $7,300. Using home equity loans to pay and close high interest accounts can save on interest and improve monthly cash flows.

2. Pay Medical Bills - One way that even responsible people end up with low credit scores is from medical bills that aren't covered by insurance and end up in collection. If you are trying to save your credit by making payments to a number of medical bills, consolidation could improve your cash flow while protecting your valuable credit rating.

3. Energy Efficient Home Improvements - If it is time to update old appliances, replace an energy guzzling heating system, or stop conditioned air from leaking through windows or the roof, consider using home equity for energy efficient home improvements. Check with your tax preparer or the IRS because the government is offering tax credits for going green. Lower utility bills and lower income taxes could improve cash flow significantly.

4. Paying For College - Some student loans carry low interest rates. It would probably not make sense to refinance those using home equity. But, if your grad was not able to get low interest rate student loans or if those low start rates are beginning to adjust up, a cheap loan such as a home equity loan could provide a better financing option.

5. End The Big Car Payment - You will likely pay more in interest if you use a home equity loan to pay off a car. It might make sense, however, if you over extended yourself. If in a weak moment you obligated yourself to a car payment you cannot afford, you could use home equity to get out of that jam. Home equity loans often have very low interest only payments that would likely improve your cash flow.

Find out how much you would qualify to borrow with a new home equity loan.

 

About Author:

Renee Morgan has been a loan officer for over eighteen years. She is also a freelance writer and guest expert for radio and TV.