Home equity is one of the most valuable assets a homeowner can build, yet many people don’t fully understand how to leverage it effectively.  
 
By managing home equity wisely, homeowners can create financial opportunities, fund major expenses, and even secure their future. 

UnitedOne Credit Union’s Local Home Loan Experts explain how to tap into home equity in the latest episode of their podcast, At Home on the Lakeshore. 

Home equity refers to the portion of a home’s value that the owner truly owns — free from mortgage debt. It’s calculated by subtracting the remaining loan balance from the home’s current market value. 

“There is that gap, and that gap is the equity,” said UnitedOne Mortgage Specialist Julie Peot, NMLS # 441412. “So, we can go ahead and tap into that and help wherever it's necessary.” 

For example, if your home is valued at $400,000 and you still owe $250,000, your equity amounts to $150,000. As mortgage payments reduce your loan balance and property values rise, your equity naturally increases. 

Beyond financial flexibility, home equity can serve as an emergency safety net. If unexpected expenses arise — such as medical bills or urgent home repairs — having equity available could provide a more affordable borrowing option compared to high-interest personal loans or credit cards. 

“You generally have a lower interest rate when you use your home as collateral than if you do an unsecured loan,” said UnitedOne Credit Union Mortgage Specialist Kari Johnsrud, NMLS #?441414. “Even sometimes a secured loan.” 

While home equity loans are commonly used for home renovations, they can serve a wide range of financial needs beyond property improvements. 

Some potential uses include: 

• Debt consolidation 
• Education expenses 
• Emergency funds 
• Vacations or weddings 
• Investment in land or property 
• Expanding or upgrading a business 

Home equity is a powerful financial tool that homeowners can use to their advantage. By making strategic decisions, increasing equity faster, and borrowing responsibly, homeowners can maximize their financial opportunities and secure their future. 
 
“If you have questions and you're not sure, that's what we love to do is just run scenarios past you and figure out what would work,” Johnsrud said. 

Whether you’re looking to buy your first home or tap into the equity of your current house for renovations, UnitedOne’s team of Local Home Loan Experts is a trusted resource in Manitowoc and Sheboygan. 

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