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Home Equity Line of Credit

By Independent Bank January 27 2016 Savings Tips, Mortgage

New year, new ambitions – how a HELOC can help

HELOC.jpgIt’s a new year and with it comes new ambitions. Whether you’d like to remodel your kitchen, take your dream vacation, or you need help with college tuition, a home equity line of credit (HELOC) can be a flexible financing option when cash is in short supply.

A HELOC allows you to borrow money against the equity in your home. A lender sets a limit, and you can use and repay the money as much as you want for a set period of time, known as a draw period.

“Since your home is used as collateral,” says Russ Daniel, Senior Vice President for Retail Lending at Independent Bank, “it’s important to fully understand HELOC features.”

Here are some key HELOC features:

Flexibility – Once a maximum loan balance is established, you can draw on the line of credit at your discretion. The minimum payment is interest only, or a minimum of $50.00, allowing you to pay the principal down at your convenience. “When you pay it down, it’s still available to borrow against without having to apply for another loan, or accrue further fees,” says Daniel.

Typically Lower Rates – Because HELOCs use a floating rate and your house is a sound piece of security, “you generally get lower rates on a HELOC than you get on other types of financing,” says Daniel. However, a floating rate (based on prime) means your rate could go up.

Potential tax savings The interest on a HELOC may be deductible on your tax return. Consult a professional tax advisor for the requirements.

For more information about HELOCs, visit IndependentBank.com/personal/mortgages /special-offers-extras.

Learn more about loan options 

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