Say “Hello” to HELOC.

A HELOC is a Home Equity Line Of Credit. Basically, that means it’s a line of credit secured by the equity you have in your home. With home prices going up, you may have more equity than you realize.

Wanna Make Something Of It?

You can use a HELOC in a variety of ways, from making home improvements to consolidating debt to covering medical expenses. HELOCs are flexible. They also allow you to draw on your line of credit on an as-needed basis.

Points Of Interest

Before you take out a HELOC, you should know that many HELOCs offer variable interest rates which usually start at an appealingly low rate. That rate can fluctuate over time, though, so you should be prepared for your payment to do so as well.

In addition, applying for a HELOC often means appraisal fees, title search fees and others. Don’t be surprised if these run several hundred dollars.

Now. Or Now And Then.

When your HELOC has been funded, you can use it all at once or as needed over a period of time, usually 5 years. During this ‘draw down’ period, you’re required to make monthly interest payments. When the drawn down period is up, you can no longer withdraw from your HELOC and must begin to pay back your principal.

Let’s Do It! What do I do?

If a HELOC sounds like the solution for you, the first step is to check with several lenders and make sure you’re getting a rate and terms that you’re comfortable with.

The application process for a HELOC is usually simpler than that for a mortgage, but you should be aware that even homeowners with a significant amount of equity may still not get every penny they anticipate. Lenders usually require borrowers to maintain 20% of their equity in their home.

In a nutshell, a HELOC can be a great way to take advantage of the equity in your home without having to sell it. If you’re interested or have some additional questions (and we bet you do,) feel free to talk to us. At FMS Bank, we’re experts in helping our neighbors put their home equity to work for them.