The HELOC Strategy
If you have purchased real estate with a down payment and/or have been paying a mortgage for some time on a property, chances are you have equity built up. Your equity is the difference between what you owe on a property and what its fair-market-value is appraised at.
People are inclined to believe that a home or office is an asset if they own it. The problem with that belief is that an asset, by definition, is something that can generate positive cash flow. Is your home providing you with cash flow….or is it the other way round?
- The taxes?
- The mortgage?
- For the upkeep?
- For improvements?
Your home is not an asset; it is a liability. Liabilities cost you.
Here is where the power of the HELOC comes in. When properly structured, a HELOC can help you pay down the cost of your property faster and, at the same time, unlock the equity (the true value) of that very same property. Once made liquid, the equity can be leveraged into other strategies that provide a higher rate of return than the interest rate being charged to use a HELOC.
Please contact us for further education on this strategy for your own wealth-building plans. You may very well be literally sitting on your assets!
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