Unlock Your Home’s Value With A HELOC
Are you getting the most from your home? Your home provides more than comfort and shelter. It can be used to establish a line of credit. A Home Equity Line of Credit (HELOC) allows you to borrow money using equity in your home as collateral. If you’re a homeowner looking to get more from your investment, discover the flexibility and opportunities a HELOC offers.
Home Equity Loan Vs. A HELOC
A home equity loan and a line of credit both allow you to tap into the value of your home, but a few differences set these two types of loans apart. A fixed-rate home equity loan operates as a standard loan, with a lump sum borrowed against the equity of your home and fixed payments made throughout the life of the loan.
A HELOC is exactly that, a line of credit. It gives you the flexibility to use it like a credit card minus the high interest rate!
Typically, a HELOC from Inspire FCU has a 10-year draw period, during which the money can be used. You access the funds via HELOC checks or by transferring funds online into your Inspire FCU checking account, making withdrawals simple and convenient. This can be a great way to pay for home improvements and remodels due to the high costs, as well as help consolidate other high interest debt. A Home Equity Line of Credit helps you make large financial transactions quicker and more strategically.
Home Equity Line Of Credit Advantages
Another advantage of our HELOC is potentially lower monthly payments. During the draw period, repayment will fluctuate based on the amount borrowed, the current interest rate, and the payment terms.
Inspire FCU offers two payment options; an Interest Only HELOC, in which the monthly minimum payments is the interest due; or, a standard 1% of the outstanding balance. This gives you the flexibility to use the money with lower monthly payments.
Draw periods are followed by a 15-year repayment period in which the line of credit is paid off in monthly installments. For homeowners interested in finding trusted, convenient financing, a home equity line of credit may be ideal.
How Is Available Equity Calculated
The amount you can borrow depends on three factors:
- Your home’s value
- The lender’s allowed percentage of the home’s loan to value
- Your remaining mortgage
First, the home’s value is multiplied by the percentage the lender is offering. This shows you the maximum amount of equity you can borrow. Inspire FCU allows homeowners to borrow up to 90% of their home’s value (LVT). So, if your home is valued at $500,000, the maximum value amount of equity you can borrow is $450,000.
Then, your remaining mortgage balance is subtracted from the maximum amount of equity.
For example: If your house is valued at $500,000 and the lender offers 90% of the home’s value (LVT*), the maximum amount to be borrowed is $450,000. If your remaining mortgage balance is $200,000, the amount you can borrow is $250,000. It’s important to talk with an expert at Inspire FCU who can clearly calculate your available line of credit and answer any questions.
When To Use A Home Equity Line Of Credit
Home improvements and remodeling are the most common reasons homeowners take out a line of credit because you’re adding value to your home. But it’s not the only way to use a HELOC. Other uses include paying off credit card debt and buying a second home.
A HELOC may not be ideal for all situations. It’s great for adding value to your home, but if you are looking to buy a car or pay for a vacation, other options, such as specific auto loans or personal loans, may be better suited. Talk with Inspire FCU and we can find the right resources for your financial needs.
Tap Into Your Home’s Equity Today
If you’re a homeowner looking for ways to finance projects and consolidate expenses, a HELOC is a proven solution. Your friendly Inspire FCU team can walk you through all available options to find the right way to get most out of your home. Call or stop by your local branch to learn how a Home Equity Line of Credit gives you financial flexibility and new opportunities.
*LTV = Loan-to-Value Rates, terms and loan-to-value (LTV) options vary based on applicant’s credit worthiness. Loan may not exceed 100% loan-to-value based on appraised value of residence. Inspire FCU is not responsible for any subordination fees charged by other lenders when refinancing. All applications subject to approval. The product is a fixed rate home equity loan or a variable rate home equity line of credit and is secured by your primary residence.