While the rise in home prices may not be ideal for home buyers, homeowners on the other hand, can take advantage of it. In fact, home prices are expected to rise by 3% in 2025. That’s why your home is not just where you live; it’s one of your biggest financial investments. And over time, as you pay off your mortgage and your property value grows, you build home equity. Equity is the difference between what your home is worth today and how much you still owe on your mortgage. But the question is, how to use home equity? It’s an asset you can tap into when you need financial flexibility.
One popular way to access this equity is through a Home Equity Line of Credit (HELOC). A HELOC allows you to borrow against your home’s equity on an as-needed basis, similar to how a credit card works. This can be a valuable tool for homeowners who want to meet significant expenses or financial goals. Learn more about how a HELOC from USPS Federal Credit Union can benefit you.
How to Use Home Equity
It’s not just about how to use home equity, but how to use home equity wisely. While there are a ton of options out there, there are some choices that are better for your financial future. Here are the three best ways a HELOC can help you make the most of your investment.
1. Home Improvement Projects
If you’ve been dreaming of remodeling the kitchen, updating the bathroom, or turning an unfinished basement into a functional living space, a HELOC can make those dreams happen. Using your HELOC for home upgrades not only improves your living experience but can also increase your home’s value.
Consider this example: A well-designed kitchen renovation or a fresh bathroom upgrade can provide a great return on investment when you sell your home. Did you know that finishing a basement can add 70% to 75% ROI? That’s huge! Even smaller improvements, like adding energy-efficient windows or new flooring, can make a big difference—not just in the value of your house but in how much you enjoy it every day.
With a HELOC, you can draw the funds you need as each project progresses, so you’re not borrowing more than necessary.
2. Debt Consolidation
Managing high-interest debts, like credit cards or personal loans, can feel overwhelming, but you’re not alone. In fact, the average debt balance was $105,056 in 2024 with the average monthly debt payment increasing from $1164 in 2023 to $1224 in 2024 according to Experian. If you’re finding yourself in this same predicament, a HELOC can offer you a way to simplify by consolidating that debt into one payment, often with a much lower interest rate.
For example, credit card interest rates are frequently in the double digits. If you were to consolidate that debt with a HELOC, you could save hundreds (or even thousands) of dollars over the life of the loan. Plus, it’s often easier to manage a single monthly payment than keep track of multiple bills.
By using your home equity to tackle your debt, you free yourself to focus on building a stronger, more stable financial future.
3. Emergency Fund
Life can be unpredictable, and having a safety net is critical. Whether it’s unexpected medical bills, urgent home repairs, or a temporary loss of income, a HELOC can act as a backup for life’s uncertainties.
Unlike a traditional loan, you don’t need to draw from your HELOC until you need it. This makes it a flexible and reliable option for covering emergencies without dipping into your savings or borrowing at high rates. Think of it as having peace of mind, knowing you have financial support when you need it most.
When used responsibly, a HELOC is an excellent way to prepare for life’s “what ifs” while helping you stay on solid financial ground.
Why a HELOC from USPS Federal Credit Union?
At USPS Federal Credit Union, we make it easy to unlock the potential of your home equity. Our HELOC options come with competitive rates and flexible terms, giving you access to funds when you need them most. Whether you’re improving your home, paying off high-interest debt, or creating an emergency safety net, we’re here to help you know how to use home equity.
Start taking advantage of your home’s equity today! Learn more and apply for a HELOC today!
Your home is more than just a place to live. With a HELOC, it can be the foundation for your financial goals. Let us help you put your equity to work!