With a HELOC, you have direct access to funds in your bank account. You really shouldn’t be using these funds irresponsibly to buy a trip to Europe or designer shoes.
Investors typically use their HELOC funds for the following purposes:
- Home Renovation - to increase the market value of their homes
- Debt Consolidation - moving high interest credit card debt that's around 22% to a lower interest rate HELOC at around the 3% range
- Investments - using the HELOC to purchase income producing investments - some people purchase equities with this.
- Down payment on an investment property
Often times people mistaken available funds in their HELOC as income, when it really is not!
Talk to your mortgage specialist about how you can qualify for a HELOC in addition to the conventional mortgage. Investor-minded people absolutely love this product but most banks and mortgage specialists don’t really offer this as an option unless you specifically ask them for it.
If you have a HELOC right now, what are you using it for?