MoneyWisdom Blog

Say Hello to a HELOC

Posted by Bill Burpeau on Jun 4, 2014 12:00:00 PM

HELOCThey say home is where the heart is ­– it may be where the smart borrowing is, too! If you've lived in your home for a while, you may have equity built up that can help you manage your finances. If you have a large purchase or expense on the horizon, or you’d like to manage debt better, a home loan could be right for you.

Home Equity Rates Are Still Low

Low home equity rates make it possible to borrow money with lower rates (much, much lower!) compared to credit cards, so you can save money in the long run. The first step is to decide which is best for you, a fixed home equity loan or home equity line of credit (HELOC).

  • A fixed home equity loan is an installment loan for a fixed amount, usually at a fixed rate. You know from the start how many payments you need to make, and the amount doesn’t change.
  • A HELOC works much the same as a credit card. You have a revolving amount to borrow against. As you pay back what you borrow, the line becomes available for you to use again. A home equity line can be the perfect financing solution home repairs and energy-efficient home projects. Having a line of credit that's easily accessible can help with college tuition, medical expenses, and can also be a lifesaver if you need funds quickly when emergency savings aren't enough.

HELOCs are attractive for many homeowners because interest rates are typically lower than other loans, and the interest paid is usually tax-deductible.* HELOC borrowers also have more flexibility around repayment than with a fixed loan.

Get the Best of Both

Hanscom FCU’s 3 in 1 Advantage plan combines the predictability of a fixed rate loan with the flexibility of a line of credit. Plus, you can designate a portion of your line as a Visa® Credit Card for even greater convenience.

Something to Talk About

Because a HELOC is secured by your home's value, you'll want to keep your borrowing amount in check. Inability to repay could result in losing your home. We’ll work with you to determine a loan limit that is appropriate for your needs and budget.

Contact us for information or to apply for a 3 in 1 Home Advantage loan. 

* Check with your tax advisor regarding tax deductibility in your situation.

Topics: Home

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