The home equity line of credit or HELOC is an ingenious financial instrument that lets you borrow cash on your home equity. It’s also known as a reverse mortgage because you only need to pay the interest and there’s no final date when the line of credit will be repaid. While it’s considered a low-risk loan, HELOC is only available for people with loans and existing mortgage.
Here are some of the advantages of a HELOC:
Higher Credit Limit
The home equity line of credit has a higher credit limit than credit cards and other loans. In most cases, you can have a line of credit as high as $ 100,000. Some lenders can push higher amounts, depending on the total value of your home. With this high credit limit, you can redraw variable amounts of cash. Afterwards, you only need to pay interest based on the amounts that you withdrew. One of the reasons why HELOC has a high credit limit is due to the minimal risk. Lenders are hedged because your home is at stake.
Some experts believe that HELOC is more reliable than a personal loan. Personal loans will only give you meager amounts while HELOCs can get you a lump sum that can be used for different purposes. Time is also on your side if you took out a HELOC. Once you’re pre-approved, you can withdraw money as soon as possible. Not all banks and lenders have the same policies, though. For your convenience, you should do a refined search online until you came up of an acceptable HELOC provider.
Good for Home Renovation Purposes
Do you want to add an extra room in your home? How about a small swimming pool? These extension and renovation projects are now possible with the help of HELOC. Since it’s flexible, you can use the loan anyway you want. But it’s wiser to use the loan for your home because its overall value will improve. With a higher home value, you can apply for higher home equity loan amounts someday.
Exceptional Credit Rating Booster
After taking out a HELOC and paid it successfully many times, you can see a huge increase in your credit rating. Many borrowers have been using HELOCs to carve their credit reputation – on top of the loan’s plethora of advantages. It pays to know the status of your credit rate before applying for HELOC. This way, you can plan on how to utilize the loan for the coming years.
Even if a home equity line of credit is advantageous, you shouldn’t take it lightly. Missing out a payment will remove the equity from your home, and the bank may foreclose. The home equity line of credit is not for people without financial discipline. Before applying for one, make sure that you’re ready for the responsibility. You also need a financial plan that will cover a minimum of ten years, especially if you have a mortgage.
Being an expat is the start of a new journey. While people envision that an expat’s life is full of parties and frolicking, the hardships are undeniable. What if you don’t have enough starting cash to begin life in a new country? How will you look for jobs or income sources? Fortunately, there’s still one card left to play: expat loan. Applying for an expat loan will get you ample cash to begin with, but you need to maximize it properly.
You can apply these simple tactics to get the most from your expat loan:
Use Your Loan to Find Freelance Projects
As an expat, it may be difficult to find a job in a foreign country. The solution? Look for freelance gigs. Nowadays, freelancing is the norm. There are thousands of jobs available in popular freelancing platforms like Upwork, PeoplePerHour, and Freelancer. By registering in these platforms, you’ll get the chance to apply for popular, high-paying jobs. You just need to mind the competition and create a convincing profile. Before you apply, it’s advisable to list down your current skills. This way, you’ll know the right jobs for you.
Run a Small Business
If your expat loan is somehow big enough, you should run a small business. This can be a small buy-and-sell racket or a food stand. If you have handyman skills, you can create your own customized projects. At first, you’ll encounter challenges in building your client base. Eventually, as your business becomes popular, profits will start rolling in. Hopefully, within few months, you can repay your loan and save enough money.
Invest a Portion of Your Loan
Sometimes, you just can’t afford the risk of a business. This is acceptable, but you still need to think of ways to make your money grow. Otherwise, you’ll be trapped with meager income. You should try investing your money in different options. Nowadays, it’s easy to find investment sources due to growing demand. Paper assets, for example, have diversified and reached thousands of investors worldwide. You can also try investing in online assets due to the low entry barrier. Before you make your investment, do your research. Find the best options that will bring you high ROI in a variable time. Use investor reviews to your advantage so that you can find the best investment providers. Also, don’t invest 100% of your loan. Manage your risk so you won’t lose greatly.
The life of an expat is not easy. There will be difficult times ahead, so you need a flexible plan. With a reliable expat loan, you can manage the difficulty of adjustment. Just remember to repay the expat loan on time so you won’t have any problems.