A line of credit home loan can be an investment in your financial future.
A line of credit home loan uses the equity in your home to offer you a fixed credit limit. The funds freed up by a line of credit can be used for any purpose, but savvy homeowners can utilise these loans to help build wealth.
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If you’ve got equity to use and don’t need it for emergencies, a line of credit loan can help you use your equity as a capital investment.
Some examples of capital investment include;
- Home improvements that could increase the value of your property
- University funds
- Investing in shares
- Buying an investment property investment
Is a line of credit the right loan for you?
A line of credit can give you access to money to achieve many of your financial goals, but before deciding on this loan, make sure you've decided on a plan and time frame for repaying the loan. If you cannot commit to a payment strategy, a line of credit may not be right for you.
Moreover, while there's nothing wrong with using a line of credit for lifestyle purchases such as holidays or cars, if your financial goal is to see a return from your line of credit loan, you should stay away from depreciating assets and luxury purchases.