Home equity lines of credit are a hyper-flexible way of turning the equity that you already have in your home into usable funds for a variety of projects. Because a HELOC is like other forms of credit, you have a great number of options in how you use your funds. If you aren’t sure what a HELOC is, check out our HELOC 101 blog and if you aren’t sure if a HELOC is right for you, check out our blog on the topic.
Renovations and Remodels
One of the most common uses for a home equity line of credit is to remodel, repair, or add a feature to a home. A HELOC allows you to only utilize the amount of money you need when you need it. Repairs and renovations typically take a significant amount of time so a HELOC is a great way to avoid paying interest on a large lump sum that you may not need on day one. Additionally, the interest that is paid on a home equity line of credit that is used for renovations may be tax-deductible.1
Purchasing a Second Home
We want to help make your dream home a reality. A HELOC can be an ideal way to help fund a second home or an investment property. A home equity line of credit allows you to avoid paying interest on any funds until the moment you need to use them. This allows you to get approved while you shop for a home, without forcing you to pay interest on money that isn’t being used.
Loan and Debt Consolidation
Do you have high-interest debts? A HELOC can be a powerful opportunity to consolidate those debts in a lower interest plan. Because First Financial Bank is currently waiving closing costs and approval fees, our home equity lines of credit won’t add unnecessarily to your burden.
You see a student loan; we see a new career. Because HELOCs have such low interest rates, one might be less expensive than a student loan once interest is factored in. If you are considering this option, it is important to carefully look at all options to ensure that utilizing a HELOC is a good option.
Have you underfunded or used up your emergency fund? If you still have outstanding costs to pay in an emergency situation, a HELOC can help you. It is important to only utilize the amount of credit that you need to handle your emergency. Once your financial situation is under control, make sure to contribute money back into your emergency fund.
These are just a few of the uses of a home equity line of credit. As always, it is important to analyze your finances before making any significant decisions related to adding to debt. While using equity is a great way to fund your goals, it isn’t without risk.
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All loans subject to credit review and approval.