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Is a HELOC right for you?
by First Financial Bank

So, you are already familiar with home equity lines of credit, or maybe you’ve read through our blogs on the topic. While a HELOC may be an appealing home equity solution for many, it isn’t the right option for everyone. Home equity lines of credit represent just one of the lending options we offer at First Financial Bank.

Reasons to get a HELOC

  • Avoid costs: A home equity line of credit is perfect for someone that wants to avoid up-front costs. We are currently waiving all closing costs and approval fees for new HELOC applications.
  • Credit friendly: Because a HELOC is secured against the equity in your home, a wider array of credit histories can be considered.
  • More control of what you owe: With a HELOC you can control when and how much you withdraw, which means that you can control how much you have to repay.
  • You have upcoming home repairs or renovations: Make your dream home a reality. Because a home equity line of credit functions more like a credit card than a traditional loan, you are able to access however much money you need, when you need it, up to your credit limit. This makes a HELOC an ideal way to fund home renovations and repairs.
  • Tax deductible: If you take advantage of the perks of using a HELOC to fund your renovations, your interest payments may be tax-deductible1. This provides you with an opportunity to lower your tax liability while improving the value of your home.
  • Low interest: While your interest rate will vary over time, First Financial Bank is currently offering rates as low as 2.75% APR2 for the first nine month of your line of credit. This rate is significantly lower than the average credit card interest rate.

Thanks to our special introductory rates, there is no better time to apply for a HELOC through First Financial Bank. 

Reasons to avoid a HELOC

  • Variable interest rate: After our promotional initial interest rate expires the rate will vary from month to month. This can make repayments less predictable than some other types of borrowing scenarios.
  • Not borrowing much money: If you aren’t borrowing a significant amount of money it may be more useful to utilize a personal loan or a credit card. The variable interest and long-term repayment schedule of a HELOC may be prohibitive in small borrowing scenarios. If you aren’t sure what the best option for your personal situation is, visit your local branch or contact us.
  • You don’t have a steady income: Because a HELOC uses your home as collateral there is a risk of foreclosure if you can’t pay the loan due to significant changes in income.
  • More debt: It is always important to understand the risks of adding more debt to your personal financial situation. While debt can be a useful tool for funding your goals, it doesn’t come without some level of risk.
  • Not a disciplined borrower: A home equity line of credit has a low initial interest rate and easy access to your funds. This can make it easy to overspend without discipline, leading a borrower to fully utilizing their credit line and dealing with higher monthly payments as a result.

Other Options

A home equity line of credit is only one of the options that First Financial Bank offers to help you turn your to-dos into done. While everyone’s financial situation is unique, here are a few alternatives to a HELOC that can be considered:

  • Home equity installment loan: This loan option utilizes the equity you have in your home to generate a lump sum loan. This loan is great for financing home renovations or repairs while providing low fixed interest rates and repayment terms.
  • RAPIDRefi: First Financial Bank offers RAPIDRefi to quickly refinance your first mortgage or consolidate a first and second mortgage through a term loan. This loan option has a fixed interest rate and repayment terms up to 20 years.
  • Personal loan: A personal loan may be a more flexible option for smaller expenses and offers one to five-year repayment terms. These loans are great for unexpected expenses or consolidating small debts.
  • Credit card: No matter what you are looking for in a credit card, we’ve got the one for you. Our Platinum and Platinum Rewards cards will let you choose between unlimited points or a low interest rate. Neither of our credit options require annual or balance transfer fees. Do you know which card is right for you?
  • Auto loan: You can certainly use a HELOC to fund a new car purchase, but in most cases an auto loan from First Financial Bank will be a better option. Our auto loans provide terms of up to 72 months and you can quickly and easily apply online.3

Resources

Home equity line of credit 101

Zillow Zestimate - Home value estimate tool. Useful for helping to determine equity.

Home equity calculator - Provides an estimate for your current home equity.

Branch locator

Contact us

 

First Financial Bank is not affiliated with any third parties mentioned above. Any reference to any person, organization, activity, product, and/or services does not constitute or imply an endorsement. By clicking on a third party link you acknowledge you are leaving www.bankatfirst.com.

All loans subject to credit review and approval.

1 Contact a tax professional.

2 APR = Annual Percentage Rate. The initial interest rate and corresponding initial Annual Percentage Rate (APR) will be 2.74% (“Introductory Rate”) for line amounts above $100,000 and 3.74% for line amounts  between $10,000 and $99,999.99. The periodic rate and corresponding annual percentage rate are discounted and are not based on the Index and margin used for later rate adjustments. This Introductory Rate will be in effect from the date of the original Credit Agreement for 9 months. The Introductory Rate will apply to new accounts with credit limits of at least $10,000, or increases to existing accounts when the increased amount is at least $10,000. All other terms and conditions will remain in effect throughout the life of the loan. Effective 9 months after the original Credit Agreement date, the Introductory Rate will adjust according to the original terms of the Credit Agreement. The Introductory Rate is valid only on primary residences and second homes. You may choose to execute a Fixed Rate Lock Option during the Introductory Rate period. The rate executed will be the available rate published at the time of execution. The Introductory Rate is not eligible to be locked in with a Fixed Rate Lock Option Loan.  Credit application must be submitted by March 31, 2020 to qualify for the Introductory Rate.

3  All loans subject to credit approval. Auto loans and Recreational Vehicle loans have a processing fee of $175 due at origination. Personal loans or lines of credit secured with a First Financial Bank savings account or certificate of deposit have a processing fee of $95 due at origination.