Key Takeaways
- Home equity may be a powerful financial tool for creating peace of mind, especially during the holidays.
- It may help pay higher-interest debt, fund home improvements, support loved ones, or prepare for future expenses.
- Using home equity lines strategically may enhance comfort, flexibility, and long-term security.
- Before borrowing, it’s important to understand your options, compare costs, and ensure the choice aligns with your financial goals.
The holidays are a time for joy, reflection, and connecting with loved ones, but they may also bring financial stress. Nearly 70% of Americans say the holidays are the most stressful part of their year. And it’s easy to see why–between travel, gifts, and rising living costs, it’s easy to feel stretched thin.
For many homeowners, financial stability may already be waiting in their home equity. Your home isn’t just where you make memories, it could be your most valuable financial assets. When used thoughtfully, home equity may help you simplify your finances, strengthen your future, and enjoy the holidays with more confidence.
Here are five meaningful ways accessing your home equity through a reverse mortgage may help you feel more comfortable, secure, and prepared for the holiday season and beyond.
1. Pay higher-interest debt
Higher-interest debt—like credit cards or personal loans—may make the holidays feel heavier and limit your cash flow. Using your home equity to refinance or pay those balances may lower your overall interest costs and simplify your monthly budget.
Reverse mortgage loans and traditional home equity lines of credit (HELOC) typically offer lower interest rates than other borrowing options, making them an effective way to create financial flexibility. This could allow you to start the new year with less financial stress.
2. Create a safer, more comfortable home
Your home is more than a place to live—it’s the center of your celebrations and your future comfort. Using home equity to make upgrades could improve safety, accessibility, and efficiency. For example, adding handrails or walk-in showers, upgrading windows or insulation for better energy efficiency, or replacing outdated heating and lighting for greater comfort.
Each project enhances daily life and could also increase your property’s value. A warm, comfortable home is the heart of every holiday memory—and a smart investment in your future.
–> A home equity conversion mortgage (HECM) is a government-insured reverse mortgage. Learn more.
3. Support family or give meaningful gifts
The holidays are about giving, but the most meaningful gifts aren’t always found under the tree. Home equity could help you create a lasting impact on your loved ones’ lives by funding opportunities or experiences. You might use a portion of your equity to help a grandchild with tuition, support an adult child’s home purchase, fund family travel, or contribute to charitable causes you care about.
Using your home’s value to give back or support loved ones could be one of the most rewarding financial decisions you make. The best gifts last far beyond the holidays, they strengthen the people and causes that matter most to you.
4. Build a financial safety net for the future
Financial confidence comes from knowing you have options. By tapping into your home equity responsibly, you could establish a reserve for unexpected expenses such as medical costs, home repairs, or market downturns.
A home equity line of credit (HELOC), for example, allows you to access funds only when needed, so you’re prepared without taking on unnecessary debt. Having a financial cushion could make all the difference when life changes unexpectedly. Knowing you have resources to rely on brings a sense of peace that lasts long after the holidays.
Learn how a HomeSafe Second mortgage may provide financial flexibility.
HomeSafe Second is a proprietary reverse mortgage loan product and is not related to the government-insured Home Equity Conversion Mortgage (HECM) program. Borrower must be 55 or older in most states.
5. Support your family’s legacy
Your home may have seen your family through the years, but now it could play a key role in building your family’s financial legacy. Your home equity may be used to help supplement retirement income, fund estate planning goals, or simply make life more comfortable for yourself and those you love.
For homeowners exploring long-term options, a reverse mortgage may offer another way to access equity. This type of loan may help you maintain financial flexibility later in life without selling or taking on additional monthly payments.
The borrower must meet all loan obligations, including living in the property as the principal residence and paying property charges, including property taxes, fees, and hazard insurance. The borrower must maintain the home. If the homeowner does not meet these loan obligations, then the loan will need to be repaid.
Your home has given you so much—now it could help you give back and create lasting security for the next generation.
–>Thinking about how to plan for your family’s financial future? Explore our guide to starting estate planning conversations.
How to access your home’s equity
If you’re considering using your home equity, there are several options available, each designed for different financial needs and goals. Understanding how they work may help you choose the right fit for your situation. Here’s a brief explanation of some of the options:
Home Equity Line of Credit (HELOC)
A HELOC works like a revolving line of credit secured by your home. You may borrow as needed during what’s called the draw period—usually 10 years—and only pay interest on the amount you use.
During the repayment period, monthly payments include both principal and interest. A HELOC may be a smart choice if you want ongoing flexibility for projects, unexpected expenses, or cash flow management.
Home equity loan
A home equity loan provides a lump sum of money upfront, which you repay in fixed monthly installments over a set term. Because it typically comes with a fixed interest rate, your payment amount won’t change, making it easier to budget. This option may work best if you have a single large expense, such as major renovations or educational costs.
Home Equity Conversion Mortgage (HECM)
For homeowners 62 or older, a HECM offers another way to access home equity without additional monthly mortgage payments. The borrower must meet all loan obligations, including living in the property as the principal residence and paying property taxes, fees, and hazard insurance. The borrower must maintain the home. If the homeowner does not meet these loan obligations, then the loan will need to be repaid.
Instead of paying the lender, eligible homeowners may receive loan proceeds disbursed as a lump sum, monthly payout, a line of credit, or a combination of these options.
The loan balance grows over time and becomes due when you move, sell the home, pass away, or fail to comply with the loan terms. A reverse mortgage may help you stay in your home while turning built-up equity into a source of funds for retirement or other goals. To stay in your home, you must live in it as your principal residence, pay taxes, fees, homeowners’ insurance, any applicable fees, and maintain the home.
To be eligible for a HECM, at minimum, borrowers must be 62 years of age or older and meet financial and property requirements, including attending HUD-approved counseling.
To learn more, visit the CFPB’s Reverse Mortgage Discussion Guide.
Key considerations before you borrow
All home equity products have costs, responsibilities, and risks. You’ll likely need to pay closing costs, appraisal fees, and loan origination charges. Because your home secures the loan, it’s essential to stay current on property taxes, insurance, and required maintenance. Borrowing against your home equity could offer significant advantages but it’s important to ensure the decision supports your long-term financial health.
–>Is a reverse mortgage a good idea? Here’s what you need to know.
Ready to reach your financial goals?
This holiday season, consider giving yourself the gift of financial confidence. When your finances are in order, it may support peace of mind for you and your loved ones.
Whether you use your home equity to simplify your finances, support loved ones, or prepare for the future, you’re not just improving your bottom line—you’re creating comfort and confidence that last well beyond the season.
Disclosures
These materials were not provided by HUD or FHA and were not approved by FHA or any government agency. A reverse mortgage is a loan that must be repaid. When the loan is due and payable, some or all of the equity in the property no longer belongs to the borrowers, who may need to sell the home or repay the loan with interest. The borrower must meet all loan obligations, including living in the property as their principal residence, and paying property charges such as taxes, fees, hazard insurance, and ongoing home maintenance. Failure to meet these obligations may result in default and foreclosure. Not tax advice. Consult a tax professional. For licensing information, visit www.nmlsconsumeraccess.org.
Danielle Antosz is the web content manager at reverse mortgage lender Finance of America Reverse LLC. The views expressed in this article are those of the author alone and do not necessarily reflect the views and opinions of their employer. This article is not intended to provide financial planning, wealth management, legal, or tax advice. For tax advice, please consult a tax professional.
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