Smart Ways to Use Your Mortgage Line of Credit

Unexpected medical expenses, funeral costs for elderly family members, and one-time investment opportunities — additional examples of how to use funds from a property-backed line of credit. There is no right or wrong way to spend the money, as each situation is unique. However, the following information may be useful for any owner who has the opportunity to use their home's value to access funds.

Home Improvement Projects

One of the important lessons homeowners learn when undertaking projects is that 'do it yourself' (DIY) doesn't always mean cheap. Although some work in this category is low-cost, most of it can become quite expensive once you start buying materials and equipment. But even with this warning, DIY improvements are an economically efficient way to make living spaces more comfortable. People usually think of patios and painting when considering ways to improve their home.

But for non-professionals looking to make the house more comfortable, there are many options. In addition to above-ground pools and barbecues, practical projects include kitchen remodeling, bathroom renovations, converting an attic or bedroom, installing a garage, and building a small greenhouse or garden room.

Financing Your Child's College Education

The cost of higher education continues to rise. The good news for parents is that a HELOC can provide quick, low-interest funding exactly when needed. Helping children pay for school is a decision parents make for various reasons. Some want to share the financial burden of education, requiring children to take out student loans that cover part of the bills.

Other mothers and fathers prefer to reduce the debt for graduates who enter the job market immediately after high school. Whatever the circumstance, a property-backed line of credit is the most convenient and financially sound approach for parents who need an effective way to cover tuition, books, fees, and other education expenses for their son or daughter over a four-year program.

Hiring Contractors

Hiring a contractor to add or enhance the overall architecture of your home is a major financial bet. Not only does it take time to find a reliable contractor, but factors such as cost, permits, and other aspects of work like adding a room, full kitchen renovation, installing an in-ground pool, or other large-scale renovations must be considered.

Wishlist Travel Trips

In most cases, people who compile a wishlist have at least one important trip near the top of their list. These trips are more than just an annual vacation. Instead, couples typically envision far-off places and exotic locations for their one-time journey.

For most working adults, using HELOC funds to pay for such trips is a reasonable decision. It's not always possible to wait until retirement to visit a special place like Egypt, Antarctica, Australia, or India. Health and other factors may require taking the wishlist trip as soon as possible. That's when a property-secured line of credit can save the day.

Unexpected Medical Bills

Unanticipated medical expenses can arise at any time. For most working adults, these costs are not covered by insurance plans. They are usually related to surgeries, required dental work, cancer treatment, and disabling incidents. Even those with the best insurance may end up responsible for large bills from out-of-network providers.

Similarly, unexpected medical bills can arise due to emergency care at non-American hospitals or clinics. It's important to challenge any medical bills you believe are not your legal responsibility. In some cases, it makes sense to hire an attorney specializing in such disputes. Try to reduce or completely eliminate the claim. When this is not possible, having an additional source of funds becomes necessary.