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How a Home Equity Line of Credit can be helpful

Posted in Borrowing Money on May 1, 2020

Money may be tight right now. And for some folks, even with the stimulus money, you may still need some extra cash to tide you over. If you own your home, then a Home Equity Line of Credit, aka as a HELOC, may be a good solution. A HELOC allows a homeowner to continuously access funds at a variable rate.

With a HELOC, the borrower has ongoing access to additional funds and the ability to withdraw only the amount of funds necessary for a specific project, purchase, or need. The repayment on a HELOC is based on the amount of the balance. As with any loan or borrowing instrument, there will be an overall limit of accessible funds.

HELOCs can be used for an array of purposes.

Help bridge a gap when money is tight

Like now, when money may be tight, a HELOC can help you bridge the gap between pay days using funds to pay for necessities and household expenses. Other ideas may include school tuition, annual dues or fees, anytime you need help with cash flow.

Emergencies

Unfortunately emergencies can happen at any time, and according to Murphy’s law, “whatever can go wrong, will go wrong,” it happens more often than we would like. From medical emergencies to your car needing a new starter, you name it, a HELOC can help you get the cash you need to pay for these unexpected expenses.

Major purchases

While the need to make a major purchase doesn’t happen every day, there are times when you have a timely need. Rather than whipping out your high interest credit card, a lower interest HELOC could be a better option. 

Home renovations

We all know how important our homes are, and perhaps even more so now since we've been sheltering in place. You want to know your home is a place you can enjoy for years to come. Because of this, home renovations can be an important option. Now that your growing family has spent more time at home, you may realize it’s time to add some living space. Or now that your child needs to practice social distancing, a pool so they can practice laps for the swim team seems like a good investment. Whatever the renovation, if it adds value to your home and to your quality of life, it’s a win-win.

Maintenance

The word maintenance sometimes gets a bad rap! But the truth is, we seldom want to dish out our hard earned money to maintain something. However, it’s important to maintain your home, your car, and more. Not maintaining a home or car (and other things) can cause damage and costly repairs that are more expensive in the long run. Having a HELOC to help pay for some of the more expensive maintenance can help soften the blow when it comes to your bank account. 

Experiences

While we don’t have a green light for travel and other normal things yet, there will come a time when we can go places and do things once again. If you need a little help to finance your adventure, you can “press go” with a HELOC. 

When is the best time to get a HELOC?

The best time to get a HELOC is before you need it. That way, when you do need the funds, whether it’s for a home improvement project, an unexpected expense, or something else, you have fast access to the cash you need. 

If you own your home and you don’t already have a Home Equity Line of Credit, now while interest rates are low may be a good time to get a HELOC.

What do I need to do to get a HELOC?

The best thing to do is to call your financial institution to speak with a HELOC specialist or a mortgage loan specialist.

For questions, more details, and to apply online, click here

 

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