home equity

6 reasons (5 good, 1 bad) to spend your home equity

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Maybe: Use equity to invest
Maybe: Use equity to invest | Adam Gault/Getty Images

Maybe: Use equity to invest

Home equity can be used to invest for a higher return as long as interest rates remain low, Lopatin suggests.

"It's inexpensive cash. If you can borrow at 4% and turn around and make an investment in the stock market and yield 8%, you made 4% on your money," he says.

However, this is a risky undertaking since the stock market has a reputation for crashing at times.

Moore says home equity can be a good source of funds to start a business or further your education, but he adds that an objective adviser should be consulted to ensure that your investment is sound.

"That kind of opportunity is a great area where using home equity makes sense," he says. "If you were retraining, going back to school or getting a certificate and putting that money to work in human capital to increase your earnings, that would be a possibility."

Looking for alternatives to using home equity? Consider a personal loan - Find the Lowest Personal Loan Rates


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