Tapping into your home’s equity is a great way to get quick access to cash and knock some big items off your to-do list. With a home equity line of credit (HELOC), your credit limit will be based on your current home valuation, and it offers the flexibility of accessing the money when you need it. A big benefit of a HELOC: You only pay interest on what you actually use.
Here are the top five most common reasons to take out a HELOC:
1) Home improvements. One of the main reasons homeowners take out a HELOC is to tackle a home renovation or remodel project. Making improvements to your home not only makes it more comfortable and aesthetically pleasing, but certain upgrades can also have a significant impact on your home’s overall value.
According to research, the top two areas of a home to upgrade are kitchens and bathrooms. Done right, they add the most resale value.
2) Consolidate debt. Some homeowners use HELOCs to consolidate credit card debt since it typically offers a lower interest rate. If you’re considering paying off your credit card debt with a HELOC, just remember that it’s best to have a long-term plan in place to ensure you can pay off the loan.
3) Emergency expenses. We say it all the time: It’s always a good idea to have an emergency fund, and your home’s equity can help. Covering large medical bills, the loss of a job, or any other unexpected or costly life event can be a good reason to utilize your equity.
4) Education. Using the equity in your home can also be a smart way to pay for college, because a HELOC may offer a lower interest rate than other loan options.
5) Travel. While some vacations can be covered within a family’s normal budget, many popular destinations can cost thousands of dollars. Using a HELOC can help finance your vacation plans without the worry of using a credit card or putting a strain on your normal budget.
Every time you pay down your mortgage loan or do something to increase the value of your home, you build equity. Equity is a major benefit to owning a home and a key piece of a homeowner’s financial security. These are just five ways you can utilize your equity, but truly the possibilities are endless.
Ready to harness the power of your home’s equity? Now is the perfect time, because you could get a HELOC from UBT with rates as low as 3.99% APRꭝ for 60 months. Learn more and apply online.
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
Learning Center articles, guides, blogs, podcasts, and videos are for informational purposes only and are not an advertisement for a product or service. The accuracy and completeness is not guaranteed and does not constitute legal or tax advice. Please consult with your own tax, legal, and financial advisors.