Getting a home equity loan before selling your home may sound unconventional, but it’s really a great idea. You can use the money to fix up the home before you sell it, increase your listing price, use it for a down payment on a new home, and have a tax deduction to help offset the costs.
Seek out home equity loans offers that will benefit you in the long run. Mortgage interest is deductible and can give you a great return. If you decide to revamp your kitchens or bathrooms to increase home value, try to stick to a budget under the amount you were given. This extra cash can be used when you are ready to move.
Make sure you are ready for a home equity loan
Getting a home equity loan before you sell is a great idea, but make sure you are ready. Find out what the loan entails, and make sure you will have the resources to start paying it back – especially if you use it for a down payment on another home before the first one is sold.
Additional considerations include:
- Costs and penalties
- Repayment options
- Interest rate
Once you have all these variables, it will be easy to determine whether this is the right way to move forward. While a great idea, you should understand how this may affect your ability to purchase another home. If you decide to use this option, make sure you get the home equity loan before you put the home on the market, or it can lesson your changes for approval.
For more information on getting a home equity loan before putting your home up for sale, contact the team at Palmetto Citizens Credit Union today.