Home Equity Lines of Credit

Home Equity Lines of Credit (HELOC’s) are awesome financial tools that allow you to borrow against the equity in your home. Whether it’s for debt consolidation, home renovations, or unexpected emergencies, a HELOC mortgage could be the financial tool you need to achieve your goals with ease.

• What is a Home Equity Line of Credit? A HELOC is a revolving line of credit secured by your home's equity. Equity is the difference between the current market value of your home and the balance of your mortgage. Unlike a traditional loan, a HELOC is a form of revolving credit, much like a credit card, which allows you to borrow and repay repeatedly, up to a predetermined credit limit. 

• Uses for Home Equity Lines:

  • Debt Consolidation: A very common and popular use these days is to consolidate high interest debt. With the rapid increase in interest rates on credit cards and the associated payment increases, many of us have been “caught out” with much higher payments than we had expected or planned for. Where credit card rates are now running in the mid-20% range, it’s typical for Heloc mortgages to run in the 9’s and 10’s, with minimum payments much lower.

  • Home Renovations: Need to freshen up your kitchen, update bathroom, or add a new deck? Enhancing your home can increase its value, and a HELOC can provide the funds needed for projects. If you use your Heloc to improve your home, the interest you pay may be tax deductible.

  • Emergency Funds: A HELOC can serve as a valuable safety net in case of unexpected expenses like medical bills, home repairs, or job loss.

• Advantages of Home Equity Lines:

  • Low-Interest Funds: HELOCs typically offer lower interest rates than other forms of borrowing, making them an excellent option for financing. The interest you pay on a HELOC may be tax-deductible if you use the funds for home improvements.

  • Quick Access to Cash: Some lenders are able to approve Helocs in as little a 5 business days. Once approved, you can access your funds with checks or a dedicated credit card, making it easy to access your funds as needed.

  • Flexibility: A HELOC doesn't require you to borrow the entire approved amount at once. You can access funds as needed, pay the balance down and then re-access the funds again. Different Heloc plans have varying draw periods for accessing funds.

  Home Equity Lines are versatile tools which allow you to tap into the equity you've built in your home. Their uses are virtually limitless, making them valuable resources to manage life's twists and turns. It's important to use them carefully, always keeping in mind that they are loans against the value of your home.