Horizon Bank


How to leverage your equity during COVID

September 10, 2020 04:24 PM

Since the beginning of the COVID-19 crisis, millions of Americans have questioned their financial stability at one time or another. We at Horizon Bank understand what a difficult time this is for you and your family, and we want to do what we can to help.

For homeowners, a Home Equity Line of Credit (HELOC) or Home Equity Loan may be worth considering.

How they Work & What they Can Do for You
These two credit offerings each have unique advantages, and both are considered forms of a “second mortgage.” Here’s a quick side-by-side comparison that may help you determine if one of these options could be helpful to you: 


Home Equity Loan

Acts as an open line of credit, similar to a credit card

Functions as a typical loan for a fixed amount, over a fixed time period 

Use it on an as-needed basis up to the total amount approved (based on the equity in your home); a HELOC can remain open for several years

Receive funds as a one-time amount, and establish your own plan for how and when to use the money over time — or pay off large bills all at once

Make monthly repayments in at least the amount of interest

Make monthly repayments in a fixed, agreed-upon amount depending on the specific amount and terms of your loan

Funds come with variable interest rates, since you may be accessing money at different times

Comes with a fixed interest rate

Payment amounts tend to increase over the life of the loan

Payments stay stable, making it a bit easier to maintain your budget

Can be used to consolidate debt

Can be used to consolidate debt

Most beneficial when your needs may fluctuate over time — with periods of more and less need 

Most beneficial when you have a clear understanding of how much money you need — for things like home improvements, college expenses, medical bills, and other debts


As with other loans, to qualify you for a HELOC or Home Equity Loan, we’ll consider things like:

  • Your credit rating
  • Your repayment history on other debts
  • How much equity you currently have in your home

To learn more about these lending options, please reach out to us today, and we can discuss the unique challenges you’re facing during this time.




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