Put the value of your home to work to achieve personal goals, save money and forge ahead in 2017.
With home values rising, more Australians have built considerable equity in their homes. Coupled with super low interest rates this provides a golden opportunity to put home equity to work. Nonetheless, turning equity into cash is best done with care – this precious resource is not something to waste.
Here are five sensible ways to use home equity.
1. Add some eco-features to your home
Save the planet and your budget. Australia may be one of the driest inhabited countries on the planet yet we are the greatest per capita consumers of water, using an average of 100,000 litres of freshwater per person annually.
Cut water bills without cutting back your lifestyle by harvesting natural rainwater. Modern poly water tanks come in a range of styles and colours, and they allow you to keep the garden lush even when water restrictions apply. Stretch your water savings further by installing low flow showerheads, tap fittings and toilet cisterns.
2. Renovate to add value
Quality home improvements can improve your lifestyle and your home’s value – and renovating can be far more affordable than relocating as you won’t face costs like stamp duty. Using home equity to improve your home can make a lot of sense as the money is being reinvested back in the value of your property.
3. Grow an investment portfolio
Property is a favourite long term asset of many Australians, and a rental investment can provide extra income through rent and the potential boost to personal wealth through long term capital gains. Even better, you may be able to use home equity in lieu of a cash deposit – talk to your local Aussie broker for details.
4. Consolidating personal debt
Streamline your finances by using home equity to consolidate a range of debts into a single low rate home loan. It means managing just one monthly repayment and the potential to save on monthly interest costs. This can free up cash for extra payments on your home loan, letting you clear the debt even sooner.
5. Prevent minor repairs becoming a major expense
If you’ve been holding off making essential home repairs, now is the time to get cracking. The sooner you act, the less likely a relatively small repair will become a major expense. A leaky shower area for instance could create significant damage to bathroom flooring over time. Your home equity can provide the funds to complete a range of must-do repairs potentially saving you a far bigger bill further down the track.
Speak to your local Aussie broker about harnessing the power of your home equity.