What Are The Common Ways People Use Their Home Equity?

Table of contents

If you choose to tap into your home equity (for example, with a cash-out refinance), then you’ll likely think long and hard about how exactly you want to leverage those funds.

Many homeowners choose to take cash out of their equity and invest it back into their financial future (therefore generating more wealth over the long term). Others choose to invest more into their quality of life, paying for costs such as family vacations, weddings, or travel.

How you choose to use your home equity is up to you. But it is a big decision that shouldn’t be taken lightly. Let’s review some of the common ways that homeowners choose to leverage their home equity.

Key takeaways

  • What are the common uses for tapping into your home equity?
  • Understanding the difference between investing in your financial future VS investing in your quality of life
  • Why it’s a good idea to consult a financial advisor before deciding how you choose to leverage your home equity

Debt Consolidation

A common reason for taking cash out of your home equity is debt consolidation. Many Americans are burdened with high-interest credit card debt. But tapping into your home equity can help you to pay off that debt and save more money over the long term on interest.

Home Improvements

Your house may very well be your biggest asset, and renovating your home can be an investment that simultaneously improves the quality of your daily life.

Updates such as newer, more energy efficient appliances, adding an extra bathroom, a fence or a deck, these sorts of renovations may raise the property value of your home while also creating a more enjoyable space for you and your family.

Emergency Expenses

One of the great things about building equity in your home is having the option to take cash out to cover emergency expenses such as medical bills. Home equity is often compared to a built-in savings account, because it gives you peace of mind knowing you have the option to take cash out in case of emergencies.


Whether it’s investing in your business, stocks, or more real estate, taking cash out to invest may give you the momentum you need to generate more wealth over the long term. If you choose to take cash out of your equity in order to invest, you may want to talk to a financial advisor for more guidance on how to create a better financial future for yourself and your family.

Tuition Or Education Costs

Another common use for tapping into one’s home equity is investing in college tuition or higher education, whether it’s for yourself or a family member. In this case, consulting with a career advisor may be a good idea to ensure you’re choosing the right education path that will pay off in the long run.

Major Life Events

The last common reason for tapping into one’s home equity is to pay for major life events such as weddings, family vacations, or travel. While these types of expenses may not necessarily grow your financial wealth, making happy memories with your family may be well worth it to you. Just don’t forget to take plenty of pictures!

Uses For Home Equity: The Takeaway

Some homeowners choose to invest their equity back into their home, their businesses, or to relieve the burden of high-interest credit card debt. These common uses for home equity focus more on improving one’s financial future and generating more wealth over the long term.

But in addition to improving one’s financial future, there’s also the overall quality of life to take into account. For example, paying for a wedding or vacation may not increase someone’s net worth, but it may be well worth it to create those happy memories with family and friends.

When deciding exactly how you want to leverage your home equity, don’t take this decision lightly. You may want to speak to a financial advisor to ensure that you’re using your equity in a responsible way that will make a real, positive impact on your financial future and/or quality of life.

Picture of Jacquelyn Sublett
Jacquelyn Sublett

I love teaching and writing on real estate, finance and mortgage topics. I find it fulfilling hearing stories of first time home buyers who we have helped with the home buying process. Writer for the Hero Homebuyer Programs™

Connect with the Author:

Recommended Posts

What Our Buyers Think

Jules S.
Read More
"5 star service is what you will get when you work with him!ᅠ Not only does he know his product like no other, he makes a special point of communicating throughout each transaction and his follow up skills are unparalleled. Perhaps most importantly, he delivers on his promises!ᅠ Give him a try for your mortgage needs.ᅠ You will not be disappointed!"
Jeremy H.
Read More
"An outstanding job handling refinances.  One of those knowledgeable, straight-shooters - which is really appreciated when you're shopping for a home loan. He can answer a million of questions with ease.  Looking back at the responsiveness, he was outstanding and you can do everything he suggested."
Jaina D.
Read More
"You can rely on them, very professional and quick in responding to your queries. He is very friendly and makes sure we understand the process and keeps us posted on the status of our loan. His efforts are greatly appreciated."
Eshawn W.
Read More
“By far the best lender we’ve worked with. Got us the best loan amount than any other lender. He worked with us hand in hand, he is professional, and he made the process enjoyable.”
Jaina D.
Read More
"You can rely on them, very professional and quick in responding to your queries. He is very friendly and makes sure we understand the process and keeps us posted on the status of our loan. His efforts are greatly appreciated."
Cass Z.
Read More
“I called looking for information about the process of applying for a mortgage/refinance and am just blown away with how helpful the information I received was!”
Stephanie F.
Read More
“I have hope because of you for making my home ownership dream come true. I feel such a connection with you and am excited to work with you. Have an amazing day!”
Rachel S.
Read More
"Highly ethical, attentive and helpful! A fantastic combination of personable and hard working. He makes everyone feel important and understood."
Cliff S.
Read More
“Hands down the best mortgage professional I’ve worked with in 20 years. Knowledgeable, honest, reliable and above all an outstanding communicator.”
Jose A.
Read More
"He worked on getting the lowest rate and kept me informed on each step of the process from the beginning to closing. Thank You!"
Nicholas H.
Read More
“Thank you for your prompt help and AMAZING assistance. Hands down, best lender I have ever worked with. Top notch!”
Read More
“I would be 100% interested in working more with you! You have proven to be an amazing lender”
Sandy C.
Read More
“Absolutely the most knowledgeable, friendly and honest expert I’ve ever worked with!”
Steve R.
Read More
"A pleasure to work with. He was very prompt and courteous with his responses and genuinely cares about the clients he works with."
Kevin H.
Read More
"Professional, responsive and honest assistance with the whole refinancing process from beginning to end."

We help you reach home ownership.

No catch. No hidden fees.

Have you served in the military or your community as a healthcare provider, teacher, or first responder? Are you a member of your local union or work for your city government?

Are you looking to buy a home but don’t know where to start when it comes to finding your best home financing options?

At Hero Home Programs™, our teams are dedicated to helping community heroes like you through the home purchasing process by finding the best grants, rebates, and loans in your area in order to maximize your savings and help you achieve homeownership.

Contact our team today to learn how we can and mortgages can change your life.

Resource Guides

Complete A to Z guides on your home purchase journey.

Learn about the process for getting a home loan

What steps you can take to improve your credit score

Tips and tricks for moving into your new home

Your step-by-step guide for buying a new home

Scroll to Top