Clients are using home equity for renovations

Renovations are the most popular use of a home equity account, finds a BMO survey.

Nearly half of people (47%) with a home equity account used it to spruce up their homes, while 22% used the account to consolidate debt, and 20% used the money for major purchases, such as a car.

Read: Soaring home prices push Canadians to renovate, not move

The potential to use the interest paid as a tax deduction was favored by 45% of the people surveyed. A better interest rate than other loan options motivated 37% of users.

The ease of accessing the funds motivated 33% of people, and the ability to get the amount or money they needed made 30% of users choose the account.

According to the study, 25% of U.S. homeowners have a home equity line or loan, and 55% opened it for a specific purpose and haven’t used it since. Slightly more than half (52%) of homeowners have never had a home equity account.

Advisor’s Dean DiSpalatro has reported on whether clients should look at their homes as an investment asset or a risk.

“For many couples, their home is their largest asset. What they may not realize is that asset could represent a significant investment risk as they approach retirement.”

Read more here.

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