There are a lot of advantages to owning your home. It's an investment that can make you some money over time, it's a place to create memories, and it can also help you out when extra cashflow is needed. A Home Equity Line of Credit (HELOC) is an open credit line that is secured by the paid value of the borrower’s home. Once approved for a HELOC, borrowers can spend the funds however they choose.
Here are some of the advantages of a HELOC:
>> Only borrow what’s needed.
A HELOC does not give borrowers a lump sum of cash. Instead, it offers a homeowner the freedom to withdraw funds from the line of credit as needed.
>> Qualify for a low rate.
Interest rates continue to hover at all-time lows. Opening a HELOC now means qualifying for low interest rates on the line of credit. Most HELOCs have fluctuating interest rates, but some lenders allow for the possibility of converting large withdrawals into fixed-rate loans.
>> Flexible terms.
Terms and repayment plans for HELOCs are generally flexible. Many lenders only require borrowers to make payments toward interest during the draw period. Once that time is over, the borrower must pay back the entire principal immediately, or over the course of 15-20 years.
>> Potential tax benefits.
A Home Equity Line of Credit could possibly offer tax benefits. Because everyone’s taxes are unique to their situation, we recommend speaking with a tax professional.
>> Build a credit score.
There’s no need for an excellent credit score to qualify for a HELOC, and on-time monthly payments can boost a homeowner’s score.
Need help finding out if you’re ready to apply for a HELOC? Give our Real Estate Team a call at 800.877.4444, we’re happy to help!