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Should you tap your home equity to invest?


Published on 2025-03-06 15:41:33 - AOL
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  • Older homeowners
  • those of the Gen X and baby boomer generations
  • were less sanguine about using home equity to invest. Only 13% and 8%, respectively, thought it a good idea, the Home Equity Insights Survey found.

The article from AOL Finance discusses the potential benefits of tapping into home equity to invest in real estate, particularly through a Home Equity Line of Credit (HELOC). It highlights that with home values rising, homeowners have more equity available, which can be used as a low-cost borrowing option for investment purposes. The article explains that using a HELOC for real estate investment can be advantageous due to the tax-deductibility of the interest if the funds are used to buy, build, or substantially improve the property that secures the loan. It also mentions the flexibility of HELOCs, allowing investors to draw funds as needed, and the potential for high returns from real estate investments, especially in a market where property values are appreciating. However, it cautions that while this strategy can be lucrative, it also carries risks such as market downturns or personal financial instability, which could jeopardize one's home if investments do not perform as expected.

Read the Full AOL Article at:
[ https://www.aol.com/finance/tap-home-equity-invest-200100205.html ]
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