Making the Most of Your Home’s Equity
With a Home Equity Line of Credit (HELOC), you can borrow against your home’s value to support a variety of financial goals. Whether you want to finance projects you plan to tackle this summer, or you’re thinking towards the future, it’s worth exploring a HELOC to evaluate if it is the right option for you.
Enjoy the flexibility of a HELOC
A HELOC is a second mortgage that enables homeowners to access the equity they have built in their home as a result of paying down their mortgage and/or making improvements. Equity is calculated as the difference between a home’s appraised value and the balance remaining on the homeowner’s current mortgage. If you have large expenditures planned and would like access to a line of credit, borrowing against the value of your home could be a great solution.
Below are a few popular ways you can take advantage of a HELOC:
- Improving your home – make upgrades to your home, like replacing the roof, remodeling the kitchen or enhancing overall curb appeal
- Consolidating debt – roll high interest rate loans and credit cards into one payment with a potentially lower interest rate to help better manage your debt
- Continuing education – pay for tuition, books or other education-related expenses, either for yourself or a loved one
- Purchasing another property – use the equity in your primary residence to help obtain a secondary or investment property
- Managing emergencies – finance unexpected expenses, such as large medical bills, urgent home or car repairs, or replacing major appliances
Advantages of a HELOC
While a HELOC provides many benefits, one of its most attractive features when compared with a traditional loan is revolving credit. Rather than borrowing a lump sum and immediately making monthly payments based on the full loan amount, a HELOC enables you to simply borrow what you need when you need it and only make payments based on the funds you have used. You can borrow up to your approved credit limit based on your home’s available equity.
Another great feature of a HELOC is the opportunity to take advantage of a variable interest rate, which is oftentimes lower than the rate on credit cards or other types of loans. That said, once you have made a withdrawal, you will need to begin repaying the principal and interest since payments can fluctuate with changing interest rates.
Get a custom fixed-rate term loan using your HELOC
If you would prefer to lock-in an interest rate and have a predictable monthly payment, Trustmark offers a customized loan option for converting the used portion of your HELOC into a traditional fixed-rate loan. For example, if you use $15,000 from a HELOC that has a credit limit of $50,000, you could convert the withdrawn funds into a custom loan with a fixed interest rate and payments and keep the remaining $35,000 in the HELOC available for future use. This is an ideal option for managing major expenses and your budget while also having funds available when needed.
When used wisely, a Home Equity Line of Credit can be a great tool to help you reach your goals now and in the future!
Apply for your HELOC online today or visit a nearby branch to speak with an associate. Full disclosure provided at time of application.
