Smart ways to use your HELOC
Tapping into a home equity line of credit can be a great way to access funds using your home as collateral. Interest rates are generally less than a typical credit card. Unlike a personal loan, a HELOC gives you the ability to access money when you need it, keeping your total interest paid even lower. A HELOC can also be a good alternative to a cash-out refinance if your current mortgage rate is lower than today's rates — or if you need to access the money promptly.
Some good uses of a HELOC are home repairs that you couldn't otherwise afford and home improvements, both of which help to maintain — or even increase — the value of your home. The interest paid on a HELOC may be tax deductible if it's used to substantially improve the home that is serving as collateral1. (As always, consult with a tax professional.)
Other smart uses for a HELOC include college tuition, which can help improve future earning power for you or your children, or unexpected medical costs, which are necessary and unavoidable.
In some cases, a HELOC can be a great way to consolidate high-interest consumer debt. However, if you would use this freed-up credit to buy more and increase your debt, a HELOC may not be the right choice.
If you'd like more information about how a HELOC works and whether or not it's the right choice for you, stop by your local Synovus branch to talk with a banker.