A HELOC is a home equity line of credit. This type of financing allows you to borrow money using the equity (equity=the value of your home minus what you owe on it) you have in your home as collateral. With a HELOC, borrowers can draw on their line of credit multiple times up to the limit set by the lender.
HELOCs are a great option for long-term expenses like home remodeling projects or college tuition payments. They give you flexible access to your money, and you only pay interest on the funds when you withdraw them. Because of this flexibility, many borrowers opt to keep their home equity line of credit open for years to cover major expenses.
Home equity loans can even help you increase the value of your home by financing major repairs or upgrades. They’re typically a much better option for these types of expenses than credit cards, because interest rates tend to be lower. Lenders are able to offer these lower rates because the loan is secured by the value of your home. In some cases, the interest you pay on a HELOC can be tax deductible, but it’s best to consult your tax advisor to make sure this applies to you.
If you’ve been dreaming of adding a pool to your backyard, finally installing a gourmet kitchen, paying off debts, or helping your son or daughter through college, give us a call at (800) 232-3642 or drop by one of our branches. We would be happy to help you get started.