Do you know how to access your equity? It is very common for people to have a home equity line of credit. If you have a $600k home that has a $100k mortgage, a bank might offer you a home equity line of credit for up to $400k. This line of credit is backed by the equity that you have in your home.
Did you know that you can also have a line of credit on a non-qualified investment account? Let’s assume you have a $500k brokerage account that you have a $100k cost basis. If you needed money, would you sell some investments and pay taxes? For many, it is better to borrow the money at current interest rates than to create a taxable event. In addition, if you don’t sell the underlying investments they have the potential to continue to grow.
I believe it is better to have the line of credits in place and not need them than need them and not have them in place.
Information in this material is for general information only and not intended as investment, tax or legal advice. Please consult the appropriate professionals for specific information regarding your individual situation prior to making any financial decision.
There are many factors and risks to consider regarding an equity line of credit, including but not limited to; maintenance calls, account minimums and processing fees.