When you need extra cash, you have many options for the source of funding. You could charge the expense on a credit card, take out a personal loan or access savings. If you are a homeowner, one option to consider is a home equity line of credit, or HELOC for short.
What is a HELOC?
A HELOC is a revolving line of credit against your home, using the equity you’ve accumulated as collateral for the loan. Rather than borrowing a specific dollar amount for one specific purchase, a HELOC provides a maximum amount that you can borrow over a specific time period, such as five or ten years. This is the “draw period.”
How would a HELOC benefit me?
There are a number of ways a HELOC might benefit you. First, HELOCs can be used for anything you want, and accessing your approved line of credit is easy. If you need to pay for home improvements or repairs, unexpected car repairs, vet bills or anything else, you will have a ready source of funds available.
You can borrow up to the maximum for your line of credit over and over again during the draw period. You will only pay interest on the amount that you’ve actually used. And, since your payments on a Mercer Savings Bank HELOC are made up of both principal and interest, you are repaying the borrowed amount faster than an interest-only loan or line of credit.
The interest rate you pay on a HELOC is variable but is generally significantly lower than credit card interest rates. This is why some people choose to use HELOCs to consolidate credit card debt.
To read more about how HELOCs work and the many benefits they offer, see our blog post on “9 Things to Know About HELOCs”.
To talk to a banker about a HELOC and to find out for yourself why Mercer Savings Bank has been a trusted community bank serving residents of Celina, Ft. Recovery and Greenville for more than 125 years, contact us today.