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December 2, 2020
HELOC 101: Making the Most of Your Home’s Equity
If you’re a homeowner, you probably already know that you’re building equity in your home over time. What you may not know is you can use the equity in your home to finance other things. That’s where a Home Equity Line of Credit (HELOC) can come in handy.
What is a HELOC?
Like the name says, it’s a line of credit, which lets you access only what you need, only when you need it. Think of it as a revolving source of funds that’s available to you, and you can access them through a Grow Visa® credit card, special checks, transfers to another Grow account or cash withdrawals.
HELOCs have the advantage of flexible repayment options (interest-only or interest and principal). Plus, Grow can close on most HELOC loan applications in as little as 15 days!
How can you use a HELOC?
The primary benefit of a HELOC is flexibility. Your lender isn’t micromanaging how you spend your loaned cash, so you can do what you like with the funds. A HELOC can be especially helpful if you plan to make a number of improvements to your home over time, and it can also be used for other purposes, such as paying for college tuition or paying down other debt.
Popular ways to use a HELOC:
- Home improvements. This is the most common reason homeowners get a HELOC. Generally, upgrades such as remodeling the kitchen and bathrooms pay off by adding value to your home when you sell, while making your home a more enjoyable place to live in the meantime.
- Pay for college. The interest on home equity may be lower than on student loans, so this may be an option for financing higher education. First, check out your other options.
- Pay off debt. Low interest is again the advantage here. But if you’re still running up credit cards after you’ve paid off the balances, home equity isn’t the solution. You may want to look at a balance transfer to a Grow Visa® credit card and stick to a debt repayment plan.
However, a note of a caution: don’t think of your home as an ATM. Remember, you’re borrowing against the value of where you live, so borrow wisely. Real estate is historically a safe investment, as home values generally rise over time, but there is no guarantee that home values will always be trending upward.
Need More Info? Call 800.839.6328, ext. 2694.
Want to learn more? Our team of professional Real Estate Loan Officers is here to help.
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