Housing prices have been rising for several years and are now at their highest level since 2006. The higher house values rise, the more you, the homeowner, can borrow via a Home Equity Line of Credit or HELOC – one of the economical forms of borrowing available with no restrictions on how the money is spent.
A HELOC uses your home as collateral. Your borrowing power is controlled by the value of your home versus the amount remaining on your mortgage. Typically, you can borrow 75-80% of your home’s equity – which, in some cases, can be well over $400K.Advantages of HELOC
HELOC offers tremendous flexibility. You only pay for what you actually use. If you have a $100,000 line of credit but only need $10,000 for two months, that’s all you pay for. It’s always comfortable knowing the money is there at a moments notice, for anything you need it for. Plus, an additional bonus that credit cards and personal loans cannot match – up to $100K in tax deductions on interest payments.
HELOC offers many benefits over alternative forms of credit, with interest rates starting as low as 3.74% (APR). But like all forms of borrowing, it also comes with some tradeoffs. Some HELOC’s may have requirements on annual minimum draw requirements, charge fees for setup or an annual service fee, and since most HELOC’s have variable interest rates, your rates could possibly rise or fall with a future rate change. Some HELOC’s also have distinct “draw” and “repayment” periods. In this scenario, you would only pay back interest on what you borrowed during the draw period and during the repayment after that, you would pay back both interest and the principle.
Now’s Your Chance to Take Advantage of HELOC
For years, homeowners in only select parts the US have been able to benefit by accessing the equity available from skyrocketing house values unique to their neighborhoods. With home values on the rise across the nation, you can now reap those same benefits to fund your home improvement project, your child’s education, consolidate and/or pay down your debt, or keep it stashed away for a rainy day – you only borrow what you need and pay back only the amount that you borrowed plus interest – as many times as you want, provided you remain within your credit limit.
If you’re ready to take advantage of your rising home value and home equity with a HELOC, you’ll want to find the lender that’s perfect for your individual situation. There are numerous lenders across the nation offering HELOC, but they’re certainly not all equal. To find the best lender for you, LendingTree offers a free service that will match you with up to 5 lenders to compare. Get matched with the lenders that are right for you. It only takes a few minutes and is completely free.