More homeowners using HELOCs to increase home value

Consumers regain confidence in America’s economy

Not only are home equity lines of credit one of the fastest growing segments in the mortgage market, but borrowers are also wisely investing their money, an article in the LA Times said.

The article explained that HELOC volume during the first half of 2014 was up by 21% compared to the same period a year ago.

Which makes sense, since home prices have been steadily rising over the last year. While the pace of home-price appreciation may not be as drastic, it is still growing.

So where is all the newly acquired cash going?

Most people aren't spending their home equity line money on dumb stuff. There's no evidence of a repeat of the wacky days of the last decade when houses morphed into ATMs and credit lines paid for groceries and nights out on the town.

Slightly more than half of current borrowers say they are using or have used their draw-downs for projects that are likely to increase the market value of their properties — updating kitchens, adding bathrooms, putting on a new roof and similar remodelings.

Other examples included consolidating debts, creating some form of insurance for unforeseeable circumstances and buying new cars. 

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