The average homeowner has around $320,000 worth of equity in their home. That money can be accessed in a variety of ways ranging from reverse mortgages to home equity lines of credit (HELOCs) to home equity loans, according to an article published by CBS MoneyWatch.
Why it matters: There are several reasons why it makes sense to consider accessing your home equity in 2025, says the article. For instance, today’s average credit card interest rate is the highest it’s ever been.
- If you can consolidate your high-rate credit card debt with a home equity loan, it may make sense to do so.
- With the average credit card debt hovering near $8,000 right now – before an expected increase in holiday spending – it makes sense to apply now.
Certain home projects, like ones highly specific to your fashion sense, are unlikely to boost your home’s value.
- Others, however, like kitchen and bathroom renovations and new landscaping, can. So, consider using a home equity loan for the latter type in 2025.
The bottom line: By using a home equity loan for these reasons in the new year, you could set yourself up for financial success in 2025 and in the years that follow.