Do you have home renovation plans for the spring? Or maybe a major expense coming up? A Home Equity Line of Credit (HELOC) might be the right fit for you! It offers flexibility to tackle those bigger home improvement projects or pay off other high-rate debt.
What is a Home Equity Line of Credit?
A HELOC is a form of revolving credit that allows you to take advantage of the equity you've built up in your home. When you use your home's equity, you're borrowing funds directly from your own equity, then repaying it — usually at a relatively low-interest rate.
Because it acts as a line of credit rather than as a standard loan, you'll have access to funding in any amount (up to the total amount of equity you have) whenever you need it. And you only pay interest on the portion you use.
How can you use your loan?
Money drawn from this type of revolving credit is intended to help you fund major expenses that provide a long-term value or benefit. For example, you may want to use it for things like:
- Home improvements
- Debt consolidation
- New car purchase
- Education expenses like college tuition
How can a Home Equity Line of Credit work for you?
Home equity lines of credit offer a few key benefits:
- The flexibility to choose how much you need at any given time. For instance, you can use your HELOC to buy building materials on your next run to your favorite home improvement store.
- Flexibility on principal repayment with the option to pay interest only.
- You may qualify for potential tax advantages on your HELOC interest*.
*Consult your tax advisor.