Is Now A Good Time To Consider a HELOC?
Owning a home has many advantages, but one of the greatest and most beneficial is the building of equity. The equity in your home can be used to help with home renovations, paying off high interest debt, or just having it for reserves. One way you can tap into that equity is with a home equity line of credit (HELOC).
A HELOC allows you to open up a line of credit on your home so that you can borrow against it’s equity. Typically, you can borrow up to 80% percent of your home’s value. This line of credit can be opened at any time, but you only use it when it is needed or you want to draw from it. Then you pay it back with interest-only payments for some time, with the balance coming due in 10 or 20 years, depending on your loan.
Here are five reasons why now might be the perfect time to look into your HELOC options.
1. Current Market.
Even as the market is becoming more steady, home values are still elevated. This could mean that you have a ton of equity in your home. While home values are not rising like they have in previous years, now might be a great time to grab the current equity you have in your home.
2. Home Renovations.
If you have been thinking about selling your home, but are holding off because of the current market situation, getting a HELOC allows you to have that extra cash to do the renovations needed or wanted. Things such as a new roof, remodeled kitchen, or addition, can help you enjoy your home more while also adding value for when you do go to sell.
3. Paying Off Debt.
With the current economic conditions, some extra money in your pocket might really help you get by. Whether that big car payment is becoming a burden or you need to get out of high interest credit card debt, having a line of credit that can be drawn from at any time with a HELOC can help you manage some of your current responsibilities.
4. Interest Rate.
If you took advantage of the recent low interest rates and refinanced, a HELOC allows you to stay in your current mortgage and interest rate, while still using the equity you have gained. So, you do not have to give up your low rate in order to get the cash you need now.
5. Larger Loan Amount.
Choosing a HELOC vs. a line of credit from a bank can give you access to a larger amount. Once you work the numbers with one of our loan officers based on your credit score, income, loan-to-value of your home, along with other factors, you may realize that you are able to get a large line of credit that you can draw on at any time for any reason.
With home values continuing to be elevated and interest rates on the rise, you might be worried about purchasing a new home or refinancing your current one to take out the cash you need. A home equity line of credit could be the answer! Contact us today to see if this option makes sense for you.