Did you know that U.S. households own $36.8 trillion in owner-occupied real estate?! While $11.5 trillion is debt, the remaining $25 trillion is straight equity. And it may come as no surprise that California is leading the way.
According to First American, homeowners had an average of $294,000 in equity in the third quarter of last year—and there’s never been a better time to put that equity to work! But where do you start?
Bankrate.com recently published a list of the top reasons to use your home equity, which included high-ticket items like college tuition, wedding expenses, home improvements and debt consolidation. However, leaning on HELOC funds does come with risk.
We asked some of California Listings expert agents for their best equity advice to make your real estate investment stretch even further:
“When looking into a HELOC or a Home Equity Line of Credit, it’s important to be careful about how much you borrow. A lot of lenders will not approve loans for unnecessary personal expenses such as an extravagant vacation or luxury vehicle, and this advice holds true even if your home equity already has a low balance on file. You may be thinking that paying for fun but unnecessary things is better than borrowing from your house. The truth of the matter though, if you spend more than what’s coming in then it can become difficult to afford all these other necessities like food and clothing as well. So take some time out now to devise a savings plan. When it comes to your home equity, don’t borrow more than you need and make sure not to overspend. You can easily put the house at risk of foreclosure for a frivolous purchase by doing these things!” —Jeff Biebuyck, Calabasas expert
Click here to read part I in our equity series with more expert advice from SoCal’s top agents