When it makes financial sense, a HELOC can work well as a tool for homeowners who require cash now as they typically offer a low interest rate and the freedom to choose what the money is used for. A HELOC is a fixed-rate line of credit with a set term. The full line of credit is disbursed, in cash, at the time of funding.
Pay for large costs you don’t have the money for
Common uses for a HELOC include a big purchase, consolidating debt, or home renovations. In other words, big ticket items that most people don’t have the money for in their bank accounts. For example, a homeowner could get a HELOC to use their home equity to pay for a new roof on their home.
Improve the value of your home
The interest you pay on a HELOC when renovating your home may be tax-deductible. If you’re using your HELOC to renovate your home, you could not only potentially save on taxes, you could be raising the future value of your home, while borrowing from the current value of your home.
Getting a HELOC through Homepoint
Applying for a Homepoint HELOC can be done completely online. You can receive a decision in 5 minutes, and, if approved, fund in as few as 5 days. 1 You may be able to borrow between $15,000 and $250,000 2 , using the equity in your house as collateral. Although the application takes only minutes, the approval process will take about 5 days. 1 Many lenders will require that you have a minimum of 20% equity in your home, as well as a good credit score and low debt-to-income ratio.
Getting a HELOC through Homepoint comes with fixed APRs as low as 5.49% 3 , so you wont have to worry about variable interest rates.
While HELOCs generally have a much lower interest rate than credit cards and personal loans, and a fixed rate through Homepoint can be advantageous, you should ensure a HELOC is right for your unique financial situation. Continue reading „A HELOC, or home equity line of credit, allows homeowners to borrow against the equity of their home“