Sponsored by Synergy One Lending

You’ve diligently been making payments on your home loan for years. Did you know that, by doing so, you’ve also created a reserve of cash that can help you reach your personal and financial goals?

That’s right—you can tap into your home equity to upgrade your space, trade up for a new home, cover unexpected expenses, fund a trip and more.

Home equity is the value of your home minus any outstanding mortgages.

“Your home equity is an underutilized resource that can provide significant financial advantages when managed wisely,” says Synergy One Lending (S1L) VP of Production Toby Arceneaux (NMLS #96596).

Arceneaux shared three ways to effectively use home equity to your advantage. Just remember: It’s important to assess your financial situation and consult with a financial adviser before making any decisions.

1. Cash-flow improvement refinancing

Refinancing allows homeowners to borrow against their home equity to access cash for various purposes — like paying off high-interest debts such as credit cards and personal loans.

“You can save on overall interest payments and lower your monthly obligations,” Arceneaux says.

Homeowners also can utilize cash-out refinancing to fund home renovations. Whether it’s modernizing the kitchen, adding an extra bedroom or enhancing outdoor spaces, these improvements can increase your home’s value.

You also can invest the cash in things like stocks and rental properties, which Arceneaux says can potentially yield higher returns over time.

Be sure to carefully review your budget to determine whether a cash-out refinance meets your long-term goals. Arceneaux says a key factor is considering the interest rate of your total debt and not just your current mortgage.

2. Home Equity Line of Credit (HELOC)

Unlike a traditional home equity loan or a second mortgage, which provides a lump sum, a HELOC lets you borrow as needed.

“This flexibility is ideal for homeowners who may not know the exact amount of funds required upfront,” Arceneaux says.

With a HELOC, you only pay interest on the amount drawn, which can lead to lower initial payments compared to traditional loans. Additionally, interest paid on HELOCs may be tax deductible.

“This allows homeowners to budget effectively, draw funds when needed for emergencies, home repairs or even travel and then pay back the borrowed amount over time,” he says.

3. Selling to upgrade

Using home equity to facilitate a move can be a smart strategy, especially in a growing real estate market. If your home no longer meets your needs — whether due to a growing family, changes in lifestyle or a desire to relocate — using the equity from your existing home can help purchase a new, larger property or move to a different area altogether.

“Selling your home can unlock substantial equity that can be reinvested into your next property,” Arceneaux says. “This could mean upgrading to a larger home with more space or a location that better suits your lifestyle.”

And, if you choose to keep your existing home, it can become a lucrative rental investment — generating passive income while maintaining a tangible asset and increasing your overall wealth.

Learn More About Synergy One Lending

Synergy One Lending, Inc., NMLS 1907235 | www.nmlsconsumeraccess.org| 610 W. Ash Street, Suite 1505, San Diego, CA 92101 | (888) 995-1256 | AL, AR, FL, GA Residential Mortgage License #70829, LA, MS, NC, SC, TN, TX. All Loans are subject to underwriting approval. Terms and Conditions apply. Subject to change without notice. Equal Housing Opportunity.

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