Skip to main content
Routing # 307075259

8 Reasons to Use a HELOC

A home equity line of credit (HELOC) can be of valuable financial option for homeowners. A HELOC allows you to tap into the equity of your home and borrow against its estimated value. The great thing is you can use the funds from a HELOC for just about anything! By using your home as collateral, you can receive a better interest rate compared to a personal loan. Here are some ideas to think about when considering a HELOC.

Home improvements
Tools for home improvements laid out on a blue deck.

One of the most common uses for a HELOC are home improvements. Improving your home or property through renovation or repairs can help to maintain or increase the value of your home. Being able to make specific upgrades you’ve always wanted to make to your home can be rewarding!

There are specific home improvements that can give you a greater return on investment. Some examples of this can include:

  • Kitchen remodels
  • Bathroom additions and remodels
  • Replacing siding
  • Repurposing a space to add to the square footage of your home
  • Improving the energy efficiency of your home. (This might include adding energy-efficient windows or energy-efficient insulation.)

On the other hand, not all improvements are created equal when considering your return on investment (ROI). For instance, a really high-end custom remodel or the addition of a swimming pool may not give you the best ROI.

Pay down debt

The interest rate on a HELOC is usually lower than the typical high-interest credit card debt that people struggle with. In that case, consolidating your higher-interest debt by paying it off with your HELOC may simplify your payments and help reduce your interest costs. This can be a win-win!

Pay tuition, student loans, or other education costs

The reality is that college is only getting more expensive. An eye-opening statistic: College tuition and fees have increased 1,120% since records began in 1978. A HELOC can help you better manage the costs associated with a college education or even a private school for your younger children.

Since a HELOC allows you to access the funds as you need them, you can borrow when a tuition payment is due, then pay down the line. Then you can borrow again when the next tuition bill or expense comes along. Think of a HELOC in terms of a credit card payment.

Down payment on an investment property or a second home

A HELOC may help purchase an investment property or second home. If you have significant equity built up in your existing home and are trying to come up with a down payment on another property, a HELOC might be your logical answer. You can access the funds through the line for your down payment and then again as you pay down the line for property improvements or enhancements down the road.

An important note on Credit Union of Denver HELOCs: there is a 10 year draw period and a 10 year repayment period (20 years total), so you have extended time to plan around your options.

Pay medical bills or long-term care expenses

Healthcare can be expensive and unfortunately, around 24% of individuals have medical bills that are overdue. When you are on a limited budget, you may need to look for other means of addressing these medical bills. A HELOC may be a good option to pay any medical bills.

This goes for long-term care expenses as well.  Many of us have aging parents who are living longer but in need of long-term care. This can be extremely costly to a family. A HELOC can be a way for you or your aging parents to pay expenses by tapping into the equity of their home.

Added cushion for an emergency

As you know, the unexpected happens and you will find yourself with a financial emergency at some point. Perhaps you have a pricey vehicle repair, your roof just sprung a leak, or your furnace just went out. The reality is that 40% of Americans do not have enough savings to cover a $400 expense. It’s always nice to have funds available to help you pay for those unforeseen events! A HELOC can be that cushion when you need it.

New business venture

If you’re trying to start a small business and are short on capital, a HELOC can help you get the funds you need. It may be easier for you to get a HELOC rather than an unsecured loan or line. The interest rate may also be more attractive than an unsecured loan. Again, you just need to be mindful that your home is collateral for the loan, so paying it back is imperative.

Paying for special events

Life is full of important events. A HELOC can help with paying for your child’s wedding, preparing for that new addition to your family, or funding your dream vacation. Planning for that special life event can be costly, so it can make sense to use your home to receive a better interest rate!

Applying for a HELOC

Learn more about our current special HELOC promotion. Have any questions relating to a HELOC?

To speak to a Credit Union of Denver Loan Specialist, give us a call 303.202.5659 | 800.280.0234 or email us at

Get Started


Sources enhanced by Credit Union of Denver: &

View All Blog Posts