Grow Financial Federal Credit Union
July 11, 2018

How to Tap & Use the Equity in Your Home

Good news, homeowners! Ten years after the crash of the housing market when values took a deep dive underwater, many homeowners are now swimming in equity. What to do with it? Let’s take a look at your options.

Tapping Home Equity

Home Equity Loan. Here, you get a lump sum of cash up front and pay it back in regular, monthly installments over a period of years. It’s a good choice if you’re making a big one-time purchase or home improvement.
• Fixed rate, so the interest on the loan stays the same
• Predictable, monthly payments

Home Equity Line of Credit (HELOC). Like the name says, it’s a line of credit giving you the flexibility to access only what you need, only when you need it. Consider this if you plan to make a number of improvements to your home over time, or as a reserve for future expenses such as college tuition.
• Flexible repayment options, (interest-only or interest and principal)
• Grow can close on most HELOC loan applications in as little as 10 days

Using Home Equity

Yes, you can spend the cash on anything. 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.
Home improvements. Generally, upgrades such as remodeling the kitchen and bathrooms pay off by adding value to your home. A big, flat-screen TV? Nice, but as an investment, you’re wasting your money.
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.

Need More Info? Call 800.839.6328, ext. 2694.


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