What is a HELOC?

A home equity line of credit (HELOC) is a form of revolving credit similar to a credit card. A HELOC allows homeowners to borrow against the equity they've built up in their homes. Equity is the difference between the current market value of your home and the outstanding balance on your mortgage. With a HELOC, you can access funds as needed up to a predetermined credit limit.  

How Does a HELOC Work?

Unlike a traditional loan, where you receive a lump sum upfront, a HELOC provides you with a line of credit that you can draw from as needed during a specified draw period, typically ten years. During this draw period, you make interest only payments on the amount you have utilized. 

Once the draw period ends, you enter the repayment period, during which you can no longer borrow funds, and you must repay the outstanding balance. Repayment periods typically last 10 to 20 years, during which you'll make regular payments that include both principal and interest.

How Can a HELOC Help You?

• Home Renovations and Improvements: Whether you're dreaming of a kitchen remodel, a bathroom upgrade, or a backyard makeover, a HELOC can provide the funds you need By leveraging the equity in your home, you can invest in improvements that increase the value of your property.
• Debt Consolidation: If you have high-interest debt from credit cards or personal loans, consolidating it with a HELOC can potentially save you money on interest payments. 
• Education Expenses: With the rising costs of education, many homeowners turn to HELOCs to fund their or their children's college tuition and expenses. By tapping into the equity in your home, you can secure funds to invest in education without the need for high-interest student loans.
• Investment Opportunities: Whether you're looking to start a new business, invest in stocks, or purchase investment properties, a HELOC can provide the capital you need to seize lucrative opportunities and grow your wealth.

A HELOC is a versatile financial tool that empowers homeowners to leverage the equity in their homes to achieve their goals. Whether you're looking to renovate your home, consolidate debt, fund education expenses, or seize investment opportunities, a HELOC offers flexibility, convenience, and potential cost savings. 

At EFCU Financial, we can help get you started with a HELOC. There are no fees or closing costs on loan amounts of $100,000 or less. 

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