There are several ways to make it happen — and one is a home equity loan.
Wondering if it’s right for you? Here’s what you need to know…
What is a home equity loan?
A Home Equity Loan is a lump sum amount that is loaned to you all at once, based on the amount of equity you have in your home. Depending on your circumstances and needs, you can borrow up to the full amount of your current equity at the time you take the loan.
A Home Equity Loan can be a good choice when you have one large expense that needs to be taken care of in the short term. You’ll have to repay it, though — so use it for things that give you a good return on your money in some way.
How is it different from a Home Equity Line of Credit?
A line of credit gives you ongoing access to funds, when you need them over time.
What are the main advantages of a Home Equity Loan?
- You can borrow one lump sum amount that you need right now — no more, and no less. Then you can pay it back over time, and make extra payments when possible, to pay it off faster. Plus, having a single loan amount won’t tempt you to spend the money carelessly.
- You’ll enjoy a fixed interest rate to help keep costs down over the life of the loan.
- Equal monthly payments of principle and interest make it easier to budget. Because payments are a flat amount and don’t fluctuate over time, you’ll be able to make it fit within your monthly spending.
Why might I take out a Home Equity Loan?
- To cover an immediate, short-term expense, like major home repairs or a wedding celebration
- To consolidate debt: By transferring high-interest credit card balances to a Home Equity Loan, you’ll pay less in interest, and be able to make a single payment each month
Preparing to talk with an advisor
A financial advisor can help you determine if a Home Equity Loan is suitable to your financial situation, and your need for funds. So schedule an appointment to discuss your current circumstances. You’ll want to be prepared to answer questions like:
- When do you need the money?
- Do you need the money for a short-term need, or something ongoing?
- How long will you need to pay back the loan?
- Can your budget accommodate another monthly payment? How much would be too much?
Talk to the expert financial advisors at Horizon Bank for details on whether a Home Equity Loan is right for you. Stop by your local branch or contact us today at 888-873-2640.