American homeowners are sitting on a significant sum of equity. In fact, the average homeowner has about $298,000 in equity, according to the data firm CoreLogic. That equity can be turned into cash using tools like home equity loans or HELOCs and used to renovate your home, pay off debts, or achieve other financial goals. Some homeowners even use these funds to buy a second house.
'You should also be confident in your second home's value before using equity to pay for it. Will the home it appreciate in value over time? If you plan to rent it out, will you be able to keep it booked and bringing in income? Plotting the future of the property is critical, experts say.'Conduct thorough research of the real estate market — especially in the area you plan to buy your second home,' says Vikram Gupta, head of home equity at PNC Bank.