Make Your House Work for You

2017-04-24

Home Equity Lines of Credit... DID YOU KNOW?

Do you know how your home’s equity can help you? You’ve got another home renovation coming up or upcoming education costs on the horizon, that will definitely make a dent in your bank account. What if you could avoid the sudden hole in your wallet? By opening up a Home Equity Line of Credit (HELOC), you can pay for your larger upcoming expenses without having to dip into your savings. Texas Bay Credit Union can help you ease the tensions of that next big project.

Borrow for What You Need:

Home Improvements
Unexpected Emergencies
Medical Bills
Education Costs
Vacations
And MORE

This isn’t like other loans. This is a line of credit that is based on your home’s equity (market value of your home less liens against the property) and provides you with a financial cushion for life’s unexpected events. Your home has been building up equity as you make monthly payments on your mortgage which now gives you the flexibility to borrow, with a variable rate, as much or as little as you need up to your limit, repay it all or in part, and borrow again over the life of the HELOC withdrawal term.

How Much Equity Do You Have?

Appraised Value – Mortgage Balances = Home Equity

Benefits of a Home Equity Line of Credit

A HELOC can be a useful financial tool for homeowners, which allows you to borrow up to 80% of your homes value minus your existing mortgage payment. Here's a breakdown of some of the benefits:

Access to Funds: A HELOC allows homeowners to access funds as needed, similar to a credit card, up to a predetermined credit limit. This can be useful for covering large expenses such as home renovations, medical bills, or educational costs.
Lower Interest Rates: Generally, HELOCs offer lower interest rates compared to other forms of credit such as credit cards or personal loans because they are secured by the equity in your home.
Flexibility: HELOCs offer flexibility in terms of repayment. Borrowers can choose to pay only the interest during the 5-year draw period, and then repay both principal and interest during the repayment period.
Potential Tax Benefits: In some cases, the interest paid on a HELOC may be tax-deductible if the funds are used for home improvements. However, tax laws can change, so it's important to consult with a tax advisor for specific details.

While you may enjoy all the benefits, it is important to note that with everything great, comes responsibility. The HELOC may help you bridge the costs of your next big project or help with those unexpected emergencies, but it will also help you keep your budget and plan for your big purchases. Ask yourself: with the help of this line of credit, will I be able to pay it back in the low monthly payments of the term? Will be able to finally afford all the things I need by opening this line of credit?