Best Ways to Use a HELOC in Colorado

March 21, 2024 by Partner Colorado Credit Union

A Home Equity Line of Credit (HELOC) can be a powerful financial tool for homeowners in Colorado. A HELOC is a revolving credit line that allows homeowners to borrow money against the equity in their home. Equity is the value of your home minus the amount you still owe on your mortgage. You can use our free online home equity calculator to help determine how much equity you have in your home.

There are no restrictions on how you can use your HELOC funds, but when used wisely, it can offer financial flexibility and other potential benefits. Here are some of the best ways to use a HELOC in Colorado.

Home Improvements

One of the most common and beneficial uses of a HELOC is a home renovation or improvement project. Whether you want to remodel your kitchen, upgrade your bathroom or add a deck, using a HELOC to fund these projects can increase the value of your home, while enhancing your living space. In Colorado, where property values can appreciate significantly, investing in home improvements can give you a high return on your investment.

Partner Colorado offers a HELOC with no closing costs* and the option to pick a fixed or variable rate. You can also use our HELOC Visa® credit card as a convenient way to access the available credit in your HELOC. This can come in handy when you discover unexpected supplies or expenses that inevitably come up during any home renovation project.

Debt Consolidation

If you have high-interest debt from credit cards or personal loans, consolidating it with a HELOC can be a smart move. Since a HELOC is backed by a valuable asset, your home, it’s secured debt which generally offers a lower interest rate than unsecured debt, like a credit card or personal loan.

By using the equity in your home to pay off other debts, you could potentially lower your overall interest rate and save money on interest payments. Plus, consolidating debt into a single monthly payment can simplify your finances and make it easier to manage your debt.

Buying an RV

Camping and exploring the great outdoors is a favorite Colorado pastime. If you’re thinking of buying an RV (Recreational Vehicle), but don’t have the cash to pay for it up front or you want to avoid taking out an RV loan, you could consider using a HELOC instead. A HELOC will typically have a lower interest rate than an RV loan. And as with any HELOC purchase, you want to make sure you’ll be able to comfortably repay the HELOC, since your home is the collateral for the loan.

Emergency Fund

Establishing a HELOC as an emergency fund can provide peace of mind and financial security. In Colorado, where natural disasters like wildfires, hail and floods can occur, having access to a line of credit can help you cover unexpected expenses such as home repairs or temporary lodging.

HELOC funds can also be used help out during other unexpected events like a job loss or medical bills. Whenever you use money from a HELOC for emergencies, it's a good idea to only borrow what you need and replenish the funds as soon as possible to be prepared for any other future emergencies.

Education Expenses

With the rising cost of higher education in Colorado, funding college tuition and expenses can be challenging. A HELOC can be used to cover education costs for yourself or your children, offering lower interest rates compared to student loans or credit cards. However, it's important to consider the risks associated with using your home as collateral and to explore all financial aid options before relying on a HELOC for education funding.

Starting a Business

Entrepreneurs in Colorado can use a HELOC to finance the launch or expansion of a small business. Whether it's funding startup costs, purchasing inventory, or covering operating expenses, a HELOC can provide the capital needed to get your business off the ground. However, it's crucial to have a solid business plan in place and carefully manage your finances to ensure the success of your venture.

Partner Colorado also offers business savings and business checking accounts to help get your business started off on the right foot.

Retirement Assistance

For homeowners nearing retirement age, a HELOC can be part of a comprehensive retirement strategy. By accessing the equity in your home, you can cover healthcare expenses or finance home modifications to help with mobility. However, it's important to consider the long-term implications of borrowing against your home’s equity and to plan for potential fluctuations in interest rates.

Ultimately, the best way to use a HELOC depends on your individual financial goals and circumstances. Whether you're looking to make home improvements, consolidate debt, invest in opportunities or prepare for emergencies, a HELOC can provide the financial flexibility you need to achieve your goals. However, it's essential to borrow responsibly, make informed decisions, and prioritize repayment to avoid putting your home at risk.


*No closing costs in most cases. An upfront appraisal fee of $450.00 may be required at member expense on loans greater than $75,000 or loan-to-value exceeding 70%. Refinancing a present loan held by Partner Colorado Credit Union is excluded from this offer. Closing costs include settlement fees, flood determination fee, title search, government fees and recording charges, taxes, and when required, appraisal fees, title insurance and any fees associated with condominium properties; no closing costs on HELOC subject to change