Home equity is the difference between your home’s appraised value and the amount you owe on your home. If property values have increased in your area or you have paid down the principal balance on your loan, chances are you have built equity in your home.
Why use your home's equity?
The Equity you've built up in your home can work to your advantage if you'd like to borrow cash for major purchases. By using the equity in your home, you may qualify for a sizable amount of credit, available for use when and how you please.
In general, interest rates for home equity loans and lines of credit are usually lower than what you'd expect to pay on a credit card because the lender's risk is lower - your home serves as collateral.
Some additional benefits:
- Offers tax advantages... In many instances, the interest paid on a home equity loan or line of credit may be tax deductible.
- Provides a new source of capital... A home equity loan is a way to finance college educations, make home improvements or buy a new car.
- Helps build home equity... Investing the money in home improvements may help to build equity while borrowing against it.
Popular uses of home equity funds:
The equity you have earned in your home can work to your advantage if you need cash for major expenditures or unforeseen expenses.
- Home improvements – Design the dream kitchen you’ve always wanted, install new siding and windows, or build an addition on your home. The sky’s the limit!!
- Debt consolidation – Combine high interest credit card debt and other loans into one convenient low interest payment.
- Education – Whether it’s your child’s education expenses or your own, pay for it all with the equity from your home.
- Emergencies – Whether it’s the old furnace you didn’t plan to replace until next year or the roof that is suddenly leaking, home ownership expenses have a way of sneaking up on you. Be prepared with a home equity loan or line of credit.
- Home purchase – Do you dream of owning a vacation home or an investment property? If so, a home equity loan or line of credit can make that dream a reality by providing the funds necessary for the down payment.
- Car purchase – Now you can have the car of your dreams all while enjoying possible tax benefits.
Home Equity Loans
- Get your money in one lump sum
- Pay it back in fixed principal interest payments over a fixed period of time
A home equity loan often makes good sense if…
- You need a set amount of money for a specific purpose, such as an addition to your home.
- You're looking to consolidate debt and minimize your monthly debt payments.
- You need the money right away.
Home Equity Lines of Credit
- Receive an established credit limit with a variable interest rate that you can access with checks and sometimes a credit card
- A set period of time, known as the draw period, during which you can draw on your line of credit
- May include the option to renew your credit line when the draw period expires
A line of credit might be the right choice if…
- You want to have money available for different reasons over a long period of time.
- You want to draw on part of it for a vacation this year and you want some available to remodel your kitchen or buy a car next year.
We also offer an option to fix the rate on all or part of your line of credit. This can make it easier to manager separate purchases and gives you the stability of a fixed interest rate