Big Goals for 2026? Use Your Home Equity!

Your Home. Your Equity.

Smart Ways Homeowners Can Use Their Equity in 2026

If there’s one thing that’s remained stable this past year, it’s home value. Because of this, many homeowners have built substantial equity. This presents a timely opportunity for financial leverage toward meaningful life goals—a perfect jump-start for your new year resolutions!

Whether you’re thinking about renovating your home, consolidating a debt, purchasing a second property, or pursuing long-term financial goals, using home equity can be a powerful tool.

When used carefully and correctly, tapping into your home equity can prove to be a great advantage. Thankfully, you have Loan Officer Sharon Dermer in your corner!

Why Home Equity Matters More Than Ever

With years of rising home values and principal repayments, many U.S. homeowners now hold significant equity in their homes. In fact, it has become one of the most accessible sources of capital available to the modern borrower. This shift has caused many homeowners to view their homes not just as living spaces, but as long-term assets—ones with potential to fund major life milestones.

“The most important thing I tell my clients is that they should be aware of when using home equity makes sense—and when it doesn’t,” explains Sharon. “Equity doesn’t ‘go bad’ if it’s left unused, so I’d rather someone take the time to understand if using it would be a good fit for them.”

4 Smart Uses of Home Equity

1. Home Improvements and Renovations

One of the most common (and often most beneficial) uses of equity is to fund renovations or upgrades in your home or on your property. Whether you plan to age in place, improve livability, or increase resale value, investing in your home can pay serious dividends.

“Using a home equity loan or a home equity line of credit to access funds can sometimes be more cost-effective than standard credit cards or unsecured personal loans,” explains Sharon. Because the loan is secured by your home, interest rates tend to be lower.”

If you’re planning major upgrades like a kitchen remodel, finished basement, or the addition of various accessibility features, tapping your home’s equity can allow you to start your project sooner and pay for it over time.

2. Debt Consolidation

For many homeowners, credit card balances, personal loans, or other high-interest debt can weigh heavily on finances. Using home equity to refinance those into a single, lower-interest loan can reduce overall interest costs and simplify monthly payments

“The debt consolidation approach can relieve financial stress and improve cash flow, but it’s not without its tradeoffs,” cautions Sharon. “Because the loan is secured by your home, you are risking that collateral if you can’t keep up with payments.”

For disciplined homeowners who are confident in their long-term stability, debt consolidation via equity can be a smart move. The key is to speak with an experienced loan officer for individualized insight.

3. Property Investment

If you have substantial equity, you might consider using it as a down payment—or even to help fund the full purchase—of a second home or investment property.

“Home equity loans offer a lower interest rate than many unsecured loan types and can provide the cash needed for a down payment, especially when you don’t want to liquidate savings,” says Sharon.

That being said, this option does increase your overall debt load. If the new property is financed with a separate mortgage, managing payments on two homes, plus a home equity loan, requires steady cash flow and financial discipline. If values drop or returns don’t meet your expectations, you may find yourself stretched a little too thin.

 4. Strategic Long-Term Planning

For many homeowners, equity isn’t just about immediate needs; it’s a strategic tool. Some use it to fund major life events, renovations for aging in place, or as a buffer for retirement flexibility. Shared-equity products—where a financial partner invests based on a future home value—are also growing in popularity.

In 2026 and beyond, with rising costs and housing markets stabilizing, having access to equity can provide a level of financial agility not available through savings alone.

Risks of Home Equity Loans

“Using home equity isn’t inherently problematic,” says Sharon. “However, it does come with important responsibilities for the borrower. These are mainly there to help reduce risk to existing assets.”

Primarily, it’s up to the homeowner to ensure they have weighed the potential benefits with the potential risks of their financing, thoroughly evaluated their current credit standing, and carefully considered the purpose of their action. Otherwise, they can place themselves at significant risk for:

• • • • Increased debt burden – Tapping equity adds a loan on top of your mortgage. Also, if you miss payments, you risk foreclosure or loss of investment.

      • Overleveraging – If you borrow too much at once, future flexibility (selling, refinancing, or starting new projects) may be limited.

      • Imbalanced debt – Using equity for short-term consumption risks burdening you with long-term debt for short-lived reward.

Questions to Ask Your Loan Officer About Home Equity Loans

If you’re considering a home equity loan, HELOC, or other equity-based funding option, be sure that you and your dedicated loan officer review:

• • • • How much equity you currently have (and how much is usable).

      • Your debt-to-income ratio, credit score, and income stability.

      • Your goals and long-term plan for the borrowed funds.

      • How adding this debt affects your overall financial health.

“Really, the best thing you can do before you tap your home equity is talk to your mortgage advisor,” says Sharon. Map out your goals, run the number for best- and worst-case scenarios—and above all: treat your home equity as a long-term asset.”

Everest says: we’re ready to help you 

make the most of what you have.

Everest Equity

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and homeowners since 2004 

Whether you’re buying or selling, trust our diverse team of professionals

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