As home prices inch up, more home owners are tapping into their equity. One in four home owners have a home equity line or loan, and more than half – 55 percent – opened it for a specific purpose and haven’t use it since, finds the 2015 BMO Harris Bank Homebuyers Report.
What are they using it for? Forty-seven percent of home owners say they use their home equity account for home improvements, followed by 22 percent who use it to consolidate debt and 20 percent who use it to make a major purchase, such as buying a car.
According to the survey, home owners say they turn to home equity lines of credit over other types of financing because the potential to use the interest paid as a tax deduction; it provides a better interest rate than other options; and the ease of accessing the funds and the ability to get the right amount needed.
Source: “Home Improvements Are the Most Popular Use of a Home Equity Account,” RISMedia (May 16, 2015)