5 ways older people can use a home equity line of credit

One perk of using HELOC funds toward accessibility improvements is that it could qualify you for a tax write-off. As long as you use the funds to “buy, build, or substantially improve” your

house, you can deduct the interest you pay on a HELOC from your taxable income. 2. TO REPAIR OR IMPROVE YOUR HOUSE You could also use funds from a HELOC to cover other home improvements and

repairs. For example, you might use the money to replace a damaged roof or fix a broken water heater. Home renovations can add value to your home — through a room addition or kitchen

remodel, perhaps. “Some also use a HELOC to purchase investment property and remodel those for flips or long-term rental properties,” says Mason Whitehead, branch manager at Churchill

Mortgage in Dallas. 3. TO PAY OFF HIGHER-INTEREST DEBTS You might also use HELOCs to pay off other debts. This often makes financial sense because HELOCs typically have lower rates than

those offered on other financial products, particularly credit cards (the average credit card interest rate in May 2024 was 21.5 percent). “HELOC interest rates are typically about half

those of credit cards,” says John Aguirre, a loan officer at Loantown in Del Mar, California. Jon Hill, a 49-year-old wedding officiant at the Dudeist Ministers in Cincinnati, knows this

firsthand. Two years ago, he took out a $70,000 HELOC to help pay off his credit card debts. “During COVID I was out of work, so I had run up a lot of debt,” Hill says. “[The HELOC] paid

that off.” Hill estimates the move saved him anywhere from 15 to 20 percent on interest costs. If you’re considering using a HELOC to pay off high-interest credit card debt, make sure you

have a plan to avoid racking up credit card debt again in the future. As Whitehead explains: “Remember, 90 percent of money management is behavior. If you have a history of getting into

credit card debt, then using a HELOC to pay off that debt likely just means you’ll be in credit card debt again within a few years and have less equity and now a HELOC payment also to

balance.” 4. TO COVER MEDICAL DEBT You may also want to use a HELOC to pay off existing medical debts you might have. Data published in 2022 from health policy foundation KFF shows that 37

percent of Americans 65 or older currently have or have had medical debt in the last five years. While the majority of those surveyed had less than $5,000 in debt, over 10 percent owed

$10,000 or more.