How a HELOC Can Benefit the Self-Employed
If you are self-employed you can reap many benefits that employees can not. You get to set your own schedule, work as much or as little as you want, and control your income. While it is attractive to work for yourself, employees also have some advantages as well. For one thing, their income is much more steady. It makes it easier to budget each month. With this problem in mind, many self-employed people have turned to a HELOC to benefit them in their journey as a self-employed person. Here are a few ways that a HELOC can benefit you as a self-employed person.
A Home Equity Line of Credit, or HELOC, presents self-employed people with a way to level out their income. When you have a substantial income one month and nothing the next, it can sometimes be hard to live this way. With a HELOC, you can steady the money over a longer period of time. A HELOC allows you access to money when you need it. It's like a home equity loan without a certain amount of money that you have to borrow. Let's say that you have a HELOC for $30,000. This means that you can borrow $100 or $30,000 depending on how much you need at a given moment. Therefore, during the slow times, you can pay bills or use the money for whatever you want. Then during the good times, you can take the extra money you make and pay off the HELOC balance. This makes every day life much more easier to deal with because you know you have a backup plan if self-employment doesn't present you with a regular salary.
Utilize Home Equity
When you have been paying on your home for a number of years, you undoubtedly have some equity built up on it. If you plan on living there for a long time, your equity just sits there. With a HELOC, you can actually take advantage of this money that is already yours for the spending. You do not have to sell your house or refinance to get the money. You just open up the HELOC and spend as much or as little as you need.
One of the big things that make a HELOC so attractive is the tax deductibility of the funds. If you have been paying a mortgage for any amount of time, you understand how big of a tax break this can be. HELOC interest is eligible for a tax deduction just like a mortgage is. This means that you can net a savings on your tax return at the end of the year. When you are self-employed, you don't have anyone forcing you to save for your income taxes. You just have to pay them on your own. Having a savings on the amount that you pay can go a long way as a self-employed person.