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9 Smart Ways to Use Your Home Equity: Wealth Creation, Life Upgrades, and a Little Fun
Author: Jamie Milam
Date: August 8, 2025
If you own a home, you put in time, effort, and, of course, finances to acquire that asset. So why not make it count for more than just your living space?
Because if you've owned your home for a few years—or even just bought it in the right neighborhood at the right time—you may have more equity than you think. And that equity means you have opportunities. It can help you achieve goals and accomplish projects you've been putting on hold for some time.
Here we'll talk about what home equity is, how you can access it through a HELOC (Home Equity Line of Credit), and nine smart ways to use it.
What is Home Equity?
Simply put, home equity is the difference between what your home is worth and what you still owe on your mortgage.
Say your house is valued at $400,000 (the current median price of a home in the Charlotte, NC metro area), and you owe $250,000 on the mortgage. That gives you $150,000 in equity. Depending on the equity you've built up and lending requirements, you may be able to borrow it to use toward other plans or projects you have.
HELOCs: Your Key to Accessing Home Equity
A Home Equity Line of Credit (HELOC) is the way most people access their home equity. HELOCs are an evolving line of credit with a variable interest rate that you can draw from as needed.
While it's true that HELOC interest rates are slightly higher than your mortgage rate, it's much lower than most credit cards. Plus, you only pay it on what you actually withdraw from the credit line, not the full line of credit.
Unlike credit cards that charge steep interest on balances, a HELOC is flexible and lets you borrow as needed, paying it back over time. As you repay what you've used, that amount becomes available to borrow again. It's an ongoing resource for homeowners, ideal for larger purchases you want to pay off over time.
Borrowing money through a HELOC means your house becomes collateral. If you default on payments, you could be at risk of foreclosure. Approach it carefully, considering your financial situation and the goals you want to reach. I've often seen credit unions offer better rates on a HELOC, especially if you already have an established relationship with them. Always talk with a trusted lender to learn about your options.
9 Ways to Use Your Home Equity
With access to your home equity through a HELOC, you can start dreaming big... Or make some practical financial decisions!
Either way, here are nine ways to use your equity:
1. Pay for major life events
I bet if you look at your calendar, there are some big upcoming events you could use a little extra cash for. Weddings, family vacations, celebratory events, or unexpected medical bills... There are lots of personal reasons to tap into your home equity.
I used a portion of mine to help fund the trip of a lifetime to Italy and Egypt with my son! It was his graduation gift and so, so amazing. I'm grateful my home equity afforded me such a memorable trip with him. (And, side note—there are some other ways to travel for free or affordably, too! It's all about those credit card points, baby.)
2. Fund for your child's college
You don't have to tell me college is expensive! My son has recently completed his first year at Clemson, so I know all about the financial implications of getting your child a good education (and the emotional transitions, too!).
Covering the cost of tuition is a good use of your home equity, as rates are typically lower than a private parent loan and certainly have better benefits than an unsubsidized student loan. You can also consider paying for other related expenses, like housing, through your HELOC.
3. Consolidate high-interest debt
If you're juggling multiple high-interest debts, like credit cards, auto loans, or personal loans, a HELOC may help you pay them off faster. You can consolidate the loans and pay them off at a lower interest rate, which saves money and simplifies the process.
4. Finish your home renovations
What's on your to-do list? All homeowners have one! Maybe you've been craving a full bathroom upgrade or some kitchen renovation. Maybe you're looking at new flooring and cabinets, or simply want to create a fun outdoor space for your family to enjoy.
Tapping into your home equity makes these higher-ticket projects a possibility and, as a bonus, is a great way to increase the overall value of your house!
5. Complete much-needed house maintenance
Roofs, windows, HVAC systems, siding, floors, and so many more things around your house will need to be replaced. Using your home equity to fund these much-needed maintenance projects can bring some peace of mind knowing everything is up to date, safe, and usable. You may even opt for upgrades, like energy-efficient appliances, which can save money in the long run.
Sure, you may be able to finance some of these things through the vendor directly, but it'll come at a much higher interest rate and would need to be paid off by the time you're looking to sell your home. A HELOC would just be frozen and paid off at the time of closing out of your proceeds.
6. Start or scale your business
Have you thought about launching a business or side hustle? Your home equity could provide the funding you need to get started—or scale up what you're already doing.
Some potential uses for the funds include buying equipment, building a website, hiring a staff member, outsourcing work to contractors, or more. Make sure you have a solid business plan in place before going this route, as you don't want to get in a tough situation where you can't make payments and risk foreclosing on your house.
7. Buy a vacation property
Whether you dream of a beachfront getaway or a cabin in the woods, buying a vacation property is a dream for many! The equity in your primary home may make it possible! For a second home, the lender will expect you to put down 20-25%, and you'd have to be able to qualify for your primary mortgage, the HELOC payment, and the new mortgage. If you have a relatively lower primary mortgage balance or one of those fantastic 3% interest rates from 2020, this would be an excellent way to have that getaway you've been dreaming of.
But, I've said it before and I'll say it again—you're using your home as collateral, so you need to be cautious and wise, particularly because your vacation property doesn't generate income unless you plan on Airbnb-ing it out! (Which, I have to say, I'm a fan of! I have an Airbnb in Charlotte if you're heading this way.)
7. Buy a vacation property
To avoid these outcomes, you want to take the high road in your communication. That means:
- Focus on the task and conversation at hand, rather than being dragged into a bunch of old issues all the time. Answer only the questions asked, without addressing (or defending) all of the emotional stuff in between.
- Avoid posting anything on social media. Not only can this be used against you in court, but it can further disintegrate your relationships and communication style.
- Be mindful of how you communicate at all times. You need to go into every conversation with a goal to stay emotionally regulated, calm, and clear in communication. This even applies to text messages, which can be used in legal proceedings. Further, some states have one-party consent, which means you can be recorded without your knowledge and it can be used in legal proceedings.
While it's hard to do these things, remember it's for a limited time. You want to keep your emotions in check and communicate them only with trusted, private individuals (very close friends or a therapist) while undergoing a divorce process. This means you can get the best possible outcome and move forward with your life.
8. Invest in a rental property
Your vacation property could be an investment property, or you may opt for other types of investments through your HELOC. This could be an investment in retail or commercial real estate, or purchasing a multi-unit building. You may purchase a rental property to have long-term renters or short-term rentals, like on Airbnb or VRBO.
There are lots of options when it comes to investing in a rental property, so consider them carefully and speak with trusted real estate and financial advisors. Again, expect to put down a minimum of 20% on this purchase for the best interest rate. There are even DSCR loans available that can proactively offset the debt by using the estimated rental income, as long as you have the down payment available! Reach out to me if you'd like to connect with a lender who can discuss those options with you.
9. Tap into it for a bridge loan
The last way to use your home equity is to tap into it for a bridge loan. This type of loan helps those who are purchasing a new home while selling their old one. Because timing doesn't always align perfectly, a bridge loan helps close that gap and may help you purchase a new home without a contingency. If you know in advance that you'll be looking to move, this would be a good route to consider because you could have the line of credit ready and available, but just not withdraw the money until the time comes.
If you're doing some prep work or updates on the property in advance of the sale, then combining this total is a consideration. There are specific bridge loan products available—I've helped multiple clients utilize them—and they work best if it's more of a last-minute process, since a HELOC can still take three or four weeks to close on.
If you're buying and selling at the same time, here are my tips to make it as seamless as possible.
Your Home Equity Unlocks Opportunity
I've worked with buyers and sellers throughout Charlotte and beyond, so I know that for many people, purchasing a home feels like a major accomplishment. You work hard to save up that down payment and find your dream home!
That's why I want you to be able to make the absolute most out of the purchase by taking advantage of all the benefits available to you as a homeowner. Because that's what your home equity is—it's a benefit to you, an asset you can leverage to unlock different personal or professional opportunities.
So, consider which of these ways to use your home equity might be a good fit! Think on it, talk with trusted advisors and friends, and then let's go! If you want to connect with me about anything related to Charlotte real estate or beyond, I'm here to talk—let's chat.
Cheers to using that home equity,
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About Me
I'm Jamie Milam, a determined AF woman who's embraced life after divorce by finding peace through self-awareness, intentional decision-making, and thrilling new travel adventures.
As a Realtor® in Charlotte, NC (and your connection to top agents nationwide), I’m passionate about guiding you through your homeownership and design goals—while also helping you create space for the things you love. My mission is to empower you to create a life of alignment too - at home, abroad, and within.
Whether it’s through real estate tips, home design inspiration, or solo travel experiences, I hope this space encourages you to discover deeper self-awareness and build a life that aligns with your passions and needs.
Have you scoped the podcast series that empowers women to make aligned decisions in a divorce?
Your Free Charlotte City Guide
Jamie Milam is a Realtor® in the Charlotte, NC area, licensed in both NC & SC, and has the ability to refer you to a number of agent partners across the nation, regardless of where you may live. She is an enthusiast for the power of awareness and believes it can be used in all facets of life to support aligned living.
**Disclosure** This post may contain affiliate links and they are at no additional cost to you, though I may earn a small commission. Don't worry, I only recommend products or services that I have tried or believe would be of great value to you! All opinions expressed are those of my own!
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