All Your Burning Home Equity Line of Credit (HELOC) Questions—Answered!
If you’ve heard of a Home Equity Line of Credit (HELOC), but you’re not exactly sure what it is and how it works, we’ve got you covered. Let’s break it down!
What is a HELOC?
You know how a credit card works, right? You have a credit limit, and you can spend as much as you want up to that limit. Once you pay down your balance, you can borrow up to your limit again. Similarly, a HELOC is also a revolving line of credit. However, it offers a significantly lower interest rate than a credit card because it’s secured by your home. A HELOC allows you to take advantage of your home’s equity, which is the difference between your home’s value and the amount owed on your mortgage.
What can I use HELOC funds for?
HELOC funds are commonly used for home improvements. You could use your HELOC to renovate a bathroom, upgrade your kitchen appliances, or build a deck, for example. A HELOC can be especially handy when you have an emergency home repair you need to take care of like fixing a leaky roof. However, some people choose to use it for other purposes such as consolidating high-interest debt or paying off medical or education expenses.
What are the benefits of opening a HELOC?
- Flexible: Instead of getting one lump sum like you would with a conventional home equity loan, you can borrow (draw) money as needed for 10 years at Landmark (terms may vary at other financial institutions). You’ll only owe on what you’ve borrowed and will have an 15 additional years to repay the balance at Landmark.
- Lower interest rates: Unlike other loans and lines of credit, such as a credit card or a personal loan, a HELOC will have a lower rate because you’re using your home as collateral.
- Interest may be tax deductible: If you use your HELOC funds for home improvement, you may be able to deduct the interest paid on your taxes.
- Boost your credit score: By adding a different type of credit to your mix and making on-time payments, your credit score can improve when using a HELOC responsibly.
How can I access HELOC funds?
If you open a HELOC with Landmark, you have several options to access your funds, including:
- Online Banking: Log into Online Banking and transfer funds from your HELOC to a Landmark, savings, checking or money market account.
- Phone Banking: Use Phone Banking to transfer funds from your HELOC to a Landmark savings, checking or money market account.
- Check: Write a check from your HELOC.
- Branch: Visit any Landmark branch to withdraw money from your HELOC.
Think a HELOC might help you meet your financial goals? See our HELOC Loan rates and apply online today!