Benefits Of A HELOC: Don’t Ignore Your Equity
If you have equity in your home, you can apply for a home equity line of credit (HELOC). A HELOC can help you pay for a major financial expense, a vacation, college education, a home renovation, or anything you want. You may be wondering, “Is a HELOC a good option for me?” Well, you’re in the right place. This blog post will provide you with some general information, as well as benefits of a HELOC.
Two Types Of HELOCS: Fixed & Variable
There are both fixed rate HELOCs and adjustable rate HELOCs. The difference between the two has to do with the interest rate. With a fixed rate HELOC, your interest rate will not fluctuate throughout the term of the loan. However, with a variable rate HELOC, your interest rate may fluctuate over time.
There are many key benefits to getting a HELOC over another type of loan.
5 Key Benefits Of A HELOC
- Debt Consolidation.
Many times HELOCs have lower interest rates than other types of loans. With a HELOC you may be able to pay off higher-interest debt at a slower rate in order to makeyour monthly payments more affordable.
- You Pay Only On The Amount You Use.
One of the major benefits of a HELOC is you only pay interest on the amount you borrow, not the entire principle. For instance, if you get a HELOC for $60,000, but only utilize $45,000, you will only pay interest on the $45,000 that you have utilized, not the entire $60,000 loan.
- Tax Advantages.
It is possible that a HELOC could provide you with various tax advantages that you are not able to get with other types of loans. In order to determine if a HELOC could provide you with tax advantages, consult your tax adviser.
- Lower Interest Rates.
HELOCs typically have lower interest rates than other types of loans. This is what makes it great for large financial expenses. One thing to keep in mind is that your credit score will have an impact on the rate that you are able to obtain. The higher your credit score, the lower interest rate you may be able to obtain.
- You Can Improve Your Credit Score.
Making timely payments on your HELOC can improve your credit score, signaling to financial institutions that you are a responsible borrower.
The first step in determining if a HELOC is right for you is to speak with a Launch FCU Home Loan Specialist. If you only need a small amount of money, a different type of loan, such as a personal loan, may be a better option simply due to the origination fees and other closing costs associated with a HELOC. Bottom line, a HELOC is typically a better option for large financial expenses, due to their typically lower interest rates. If you are still unsure on if a HELOC is the right option for you, consult your local Home Loan Specialist.
© Copyright 2016 Launch Federal Credit Union. All Rights Reserved
- Best Places To Watch A Launch On The Space Coast
- 10 Tips To Prepare For Tax Season
- How To Raise A Money Smart Kid
- How to Avoid Bad Check Scams
- 9 Frugal Family & Date Night Ideas!
- 8 Ways to Jump Start Your 2020 Financial Resolutions
- 8 Easy Ways to Avoid Holiday Travel Stress
- 4 Tips On Snagging a Lower Interest Rate Mortgage
- 7 Tips for Avoid Cyber Criminals on Cyber Monday
- Avoid Gift Card Scams This Holiday Season
- Make Your Auto Loan Process Seamless: Here’s What You Need to Refinance!
- If It Connects, Protect It: Maximize Security on Devices
- How to Stay Safe Trick-Or-Treating This Year
- How to Stay Safe on Social Media
- 5 Tips on How You Can Be #CyberAware
- 7 Tips For Donating to a Charity
- 8 Tips for Creating Account Passwords
- 5 Tips to Prepare for a Hurricane
- 6 Tips for Back to School
- Should You Buy A New Or Old Home?
- February 2020
- January 2020
- December 2019
- November 2019
- October 2019
- September 2019
- August 2019
- February 2019
- January 2019
- December 2018
- November 2018
- October 2018
- September 2018
- August 2018
- July 2018
- June 2018
- May 2018
- April 2018
- March 2018
- February 2018
- January 2018
- December 2017
- October 2017
- September 2017
- August 2017
- July 2017
- June 2017
- May 2017
- April 2017
- March 2017
- February 2017
- January 2017
- December 2016
- November 2016
- September 2016
- August 2016
- July 2016
- June 2016
- May 2016
- April 2016
- March 2016
- February 2016
- January 2016
- December 2015
- November 2015
- October 2015
- September 2015
- August 2015
- July 2015