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3 reasons to use your home equity to buy another home
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Owning a home has its perks, and one significant advantage of homeownership is the equity you build over time. In fact, right now, the average homeowners has nearly $200,000 worth of tappable equity that can be borrowed against, typically at a competitive interest rate.
So, what can you do with $200,000 in home equity at your fingertips? For some, the answer is to buy another house.
Since the proceeds of home equity loans can be spend on , nothing is stopping you from using yours to purchase another home. And, there are multiple instances in which doing so may be a wise idea.
Find out how much home equity you can tap into now.
3 reasons to use your home equity to buy another home
A home equity loan or home equity line of credit (HELOC) could allow you to borrow a substantial amount of money when you need to. Here are three reasons why it may be a good idea to use that money to buy another home:
You have lots of equity but limited cash
When you purchase a new home with a mortgage, a 20% down payment lets you avoid paying for private mortgage insurance (PMI). If you’re purchasing a $200,000 home, a 20% down payment equates to $40,000.
But if you have limited cash on hand, you may face challenges with purchasing a new home as a vacation or investment property. Or, you could be on the hook for extra costs, like PMI, related to the new home.
A home equity loan could help. For starters, you typically don’t have to make a down payment to tap into your equity. And, you may be able to wrap your home equity loan closing costs into the loan itself to avoid paying out of pocket for the loan costs.
Get access to the cash you need with a home equity loan today.
You want to create a passive income stream
If you want to generate passive income, using your home equity to purchase another house could be the key to doing so. After all, you can use your new home to generate passive income with:
- A long-term rental: You can purchase the new home to use as a long-term rental. This can be done on your own or by enlisting the help of a property management company.
- A short-term rental: You can also list the new home as a short-term rental on websites like Airbnb and VRBO, provided that you’re following all the local regulations and requirements for doing so. While the income from a short-term rental may not be as consistent as a long-term rental, you may be able to charge more per day when you rent your home out on a short-term basis.
You want a vacation home
Your home equity can also help you buy the vacation home you’ve been dreaming about. Maybe you want a home by the lake to escape city life or want to purchase a small loft in the city to visit during the holidays. Or, maybe you want a second home that’s closer to your grown children or family members but you aren’t interested in relocating. While purchasing a new home can require a significant amount of cash, you could use your home equity to help cover those costs.
Purchase your second home with a home equity loan now.
The bottom line
If you want to purchase a second home, a vacation property or an investment property, you may want to find out how much home equity you have available. Right now, the average homeowner has a lot of home equity they can tap into — and one big benefit of these loans is that they usually come with competitive interest rates. As such, a home equity loan could be a viable option for financing your next real estate purchase.
NEW YORK — Former New York Gov. David Paterson and his stepson were attacked in New York City on Friday night, authorities said.
The incident occurred just before 9 p.m. on Second Avenue near East 96th Street on the Upper East Side, according to the New York City Police Department.
Police said officers were sent to the scene after an assault was reported. When officers arrived, police say they found a 20-year-old man suffering from facial injuries and a 70-year-old man who had head pain. Both victims were taken to a local hospital in stable condition.
In a statement, a spokesperson for the former governor said the two were attacked while “taking a walk around the block near their home by some individuals that had a previous interaction with his stepson.”
The spokesperson said that they were injured “but were able to fight off their attackers.”
Both were taken to Cornell Hospital “as a precaution,” he added.
Police said no arrests have been made and the investigation is ongoing.
The 70-year-old Paterson, a Democrat, served as governor from 2008 to 2010, stepping into the post after the resignation of Eliot Spitzer following his prostitution scandal. He made history at the time as the state’s first-ever Black and legally blind governor.
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A 17-year-old boy was critically injured and a person is in custody after a gunman opened fire on a SEPTA bus in North Philadelphia Friday evening, police said.
At around 6:15 p.m., Philadelphia police were notified about a shooting on a SEPTA bus traveling on Allegheny Avenue near 3rd and 4th streets in North Philadelphia, Inspector D F Pace told CBS News Philadelphia.
There were an estimated 30 people on the bus at the time of the shooting, Pace said, but only the 17-year-old boy was believed to have been shot. Investigators said they believe it was a targeted attack on the teenager and that he was shot in the back of the bus at close range.
According to Pace, the SEPTA bus driver alerted a control center about the shooting, which then relayed the message to Philadelphia police, who responded to the scene shortly.
Officers arrived at the scene and found at least one spent shell casing and blood on the bus, but no shooting victim, Pace said. Investigators later discovered the 17-year-old had been taken to Temple University Hospital where he is said to be in critical condition, according to police.
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Through their preliminary investigation, police learned those involved in the SEPTA shooting may have fled in a silver-colored Kia.
Authorities then found a car matching the description of the Kia speeding in the area and a pursuit began, Pace said. Police got help from a PPD helicopter as they followed the Kia, which ended up crashing at 5th and Greenwood streets in East Mount Airy. Pace said the Kia crashed into a parked car.
The driver of the crashed car ran away but police were still able to take them into custody, Pace said.
Investigators believe there was a second person involved in the shooting who ran from the car before it crashed. Police said they believe this person escaped near Allegheny Avenue and 4th Street, leaving a coat behind.
According to Pace, police also found a gun and a group of spent shell casings believed to be involved in the shooting in the same area.
“It’s very possible that there may have been a shooting inside the bus and also shots fired from outside of the bus toward the bus,” Pace said, “We’re still trying to piece all that together at this time.”
This is an active investigation and police are reviewing surveillance footage from the SEPTA bus.