Home equity: A powerful tool

March 23, 2021
home renovation plans

Spring is finally here, and that means it’s time to tackle the home improvement to-do list you’ve been dreaming of all winter. Whether it’s a major home remodel project, creating a new outdoor entertaining space for socially distanced get-togethers, or simply giving your bathroom a facelift, you’ve got a powerful tool at your fingertips: your home’s equity.

What is home equity?

Home equity is the amount of your home that you “own,” thanks to your down payment and monthly mortgage payments. Your equity increases over time as your property value increases or as you continue to pay down the balance on your mortgage loan.

For example, let’s say you purchased a home for $250,000. At the time of purchase, you put $50,000 toward the down payment and have since paid an additional $10,000 in principal off your mortgage loan. This means that you have $60,000 of equity in your home.

Utilizing the power of a home equity line of credit

Building equity in your home is important for a variety of reasons, one being you can borrow against it. Savvy homeowners use the equity in their home for a number of life’s necessities (and luxuries) — educational expenses, debt consolidation, vacations, and home improvements, to name a few. One of the ways to do this is through a home equity line of credit, or HELOC.

A HELOC is similar to a credit card (but very likely with a lower interest rate). It’s useful for situations where you’ll need funds over a longer period of time and not a large lump sum up front. And those funds are easy to access, too: We can issue a debit card that’s attached to your HELOC, and you’ll have 24/7 access via UBTgo.

HELOCs have many benefits:

  • Access to funds when you need it
  • You only pay interest on the amount you use
  • Lower interest than other lines of credit
  • Flexibility to repay over a longer period of time

A HELOC allows you the freedom and flexibility to tackle one or multiple projects over a longer period of time without having to reapply for funds. It’s a line of credit that allows you to use the funds as you need them — and what could be easier than that?

If you’re interested in taking out a HELOC, now is a great time to do so: You can get a HELOC from UBT with rates as low as 3.99% APRꭝ for 60 months (subject to credit approval, of course). Click here to learn more and apply online.

  • Personal
  • Managing Your Money
  • Owning a Home
  • Home Equity

ꭝOffer subject to credit approval. Requires automatic payment from UBT checking account. Minimum loan amount of $10,000 in new money. Promotional APR of 3.99% (daily periodic .010932%) effective for a 60-month period from the date account opened. Upon expiration of the 60-month period, rate will be variable equal to Wall Street Journal published Prime Rate (“index”) then in effect plus a margin. The index as of 03/01/2021 is 3.25%. Current margins range from .50% to 4.00% resulting in corresponding variable APRs up to 7.25% based on the current index. The variable rate may change monthly and is subject to minimum APR of 5.00% and a maximum APR of 16.00%. Fees to open the plan range from $220 to $815 and there is a $49 annual fee. You must also carry insurance of the property that secures this plan. Consult your tax advisor on deductibility of your interest. For applications received by 05/31/2021. Not valid on loans in process

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