Tap Into Your Home’s Equity

 

 

You can use your Home Equity Line of Credit (HELOC) to “Beat the Bank.” Simply loan the HELOC funds at a higher interest rate than you pay the bank to borrow them. Your profit is the difference between the interest payments you received and the interest payments you pay the bank. For example:

CASH OUTFLOW

Loan using HELOC: $70,000

Term: 12 months

HELOC Interest Rate: 4.5%

Total Interest Paid: $3,156

CASH INFLOW

Repayment: $70,000

Term: 12 months

Interest Rate: 8.0%

Total Interest Received: $5,600

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