Knowledge Center

How to Tap into Your Home’s Increased Value

buying-a-home | Read Time: 3 minutes

By Susan List | Published: January 2022


Chances are, you’ve seen your home’s value increase significantly over the past year. A white-hot real estate market, fueled by low interest rates and the need for more space for many families, has driven housing demand and values up throughout the country.

If you are planning to remain in your current home, this is great news, as its increased value opens several financial possibilities for you to take advantage of still-low rates and rising equity you have in your home.

Here are a few options to maximize your home’s value and reinvest into your financial future.

Open or Use a Home Equity Line of Credit
A home equity line of credit, or HELOC, works similarly to a credit card, but the interest rate is lower than most credit cards.

With a HELOC, you have the flexibility to use it as a variable interest credit line, based on your equity in your home, and make interest-only payments over a 10-year draw period, or you can lock into a fixed rate and term.

A HELOC can be a good option for a home improvement project or remodel, consolidating higher interest credit card balances, or even to pay for a vacation.

Reinvest with a Remodel
With prices soaring and inventory levels still low, many homeowners are going the remodel route for their current homes, and for good reasonthey can achieve the design and comforts they want and need while reinvesting into their property.

If you plan to complete a home remodel or renovation, a home equity installment loan is a great choice. With a home equity installment loan, you receive a lump sum up front to spend on your project(s), then have predictable, fixed payments and terms over an agreed upon period to pay it back.

You can use the money to pay for one large project or a few projects in succession over a short period of time, whichever is best for you.

Lower Your Mortgage Payment and Get Cash You Need
Another great use for your home’s equity that has tons of flexibility is a cash-out refinance. Even if you already have a HELOC, you can still take advantage of a cash-out refinance to get the money you need.

A cash-out refinance replaces your current mortgage with a larger one—at the lower interest rate—and gives you access to the cash that makes up the difference between the two mortgages.

You can use the cash for anything you want, like paying off a student loan, paying for a child’s wedding or any other need. It’s your cash to spend however you want to.

Whichever option you choose to maximize your home’s value and equity, it’s important to have a plan. If you plan to pay for a wedding, vacation or consolidate debt, make sure you have a firm understanding of how much you need, then talk to your banker or mortgage lender to determine the best option.

If you are planning a home remodel, make sure you get at least three estimates and have a firm agreement on timing, how long the estimate is good for (costs for materials are rising, too) and do your due diligence to ensure the contractor you choose is a reputable company that delivers on their promises.

About the Author – Susan List
Susan List is Senior Vice President, Director of Consumer Lending for WSFS Bank, holding various leadership roles with the Bank for more than 23 years.



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