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A HELOC is a line of credit that’s like a credit card—think of the value of your home equity as the credit card. You can borrow and repay as you need to, but before you go crazy on the home renovations, know that you are paying interest on the credit.
So, what are some of the perks with HELOCs? HELOCs, most of the time, have lower interest rates than other lines of credit such has credit cards, personal loans, etc and interest may be tax deductible if you use the HELOC for home renovation costs.
Don’t sleep on the fees–make sure you ask your lender if you have to pay application, annual, or cancellation fees before you proceed.
I don’t know about you, but I love the sound of tax deductions from Uncle Sam.
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Rianka R. Dorsainvil, CFP®️ is the Co-Founder and Co-CEO of 2050 Wealth Partners a virtual, fee-only comprehensive financial planning firm dedicated to serving first-generation wealth-builders, entrepreneurs, and thriving professionals. Rianka also hosts 2050 TrailBlazers, a podcast aimed to address the lack of diversity in the financial planning profession by engaging industry experts and leaders in conversation.
As an award winning successful, millennial Certified Financial Planner professional, Rianka offers a unique perspective not only on the current state of the financial service industry, but on how to stay relevant in an ever-changing world.
Rianka serves as a member of CNBC’s Digital Financial Advisor Council and CFP Board’s Diversity Advisory Group, is a Forbes Personal Finance Contributor, and has been recognized for her accomplishments and leadership within the industry by leading publications and organizations such as Investment News’ inaugural 2017 Women to Watch Rising Star and Wealth Management’s Ten to Watch in 2018. She has been published in PBS NewsHour, Forbes, USA Today, Black Enterprise, CNBC, Women’s Health, and more.