HELOCs Reimagined
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Have you ever dreamed of jetting off to an international destination, relaxing tropical beach, or vibrant city, only to be held back by the cost of the trip? Enter HELOCs! Home Equity Lines of Credit could be your ticket to unforgettable vacations.
HELOCs have long been used as a flexible borrowing option, allowing homeowners to tap into the equity they've built up in their properties. Typically, they function as a revolving line of credit, similar to a credit card, with your home serving as collateral. This means you can borrow against the equity in your home, up to a certain limit, and repay it over time.
In 2019, a survey on HELOCs was performed and an untraditional trend among millennials and their use of them was unveiled. The data showed that instead of using a HELOC for home-improvement ventures, Millennials were much more likely to put the money towards:
This nontraditional perspective is a reminder that HELOCs are not only a tool to improve your home but can enhance your overall life.
Assess Your Equity: Begin by determining the equity available in your home. This is calculated by subtracting your mortgage balance from the current market value of your home.
Apply for a HELOC: Once you have a clear picture of your equity, apply for a HELOC. The approval process typically involves a credit check and an assessment of your home's value.
Access Your Funds: Once approved, you'll have access to a line of credit based on the equity in your home. You can withdraw funds as needed, up to your approved limit.
Plan Your Dream Vacation: With your HELOC funds in hand, it's time to plan your vacations. Whether it's a luxurious cruise, a European adventure, or a tropical getaway, the choice is yours.
Repayment Flexibility: HELOCs offer flexibility when it comes to repayment. You can choose to make interest-only payments during the draw period, the first 10 years, followed by a repayment period where you pay back both principal and interest.
Low Interest Rates: HELOCs often come with lower interest rates compared to credit cards or personal loans, making them a cost-effective option for financing your travels.
Flexible Repayment Terms: Enjoy the flexibility of making interest-only payments during the draw period, giving you more control over your finances.
No Restrictions on Use: Unlike some other loans, a HELOC gives you the freedom to use the money for whatever purpose you choose, including travel.
Potential Tax Benefits: In some cases, the interest paid on a HELOC may be tax-deductible, providing potential savings come tax time. However, you should consult a tax advisor regarding the deductibility of interest and charges for the line.
Don't let finances hold you back from experiencing the world. By reimagining HELOCs as a tool for financing vacations, you can turn your travel dreams into reality. With low interest rates, flexible repayment terms, and the freedom to use the funds as you please, a HELOC offers a convenient and cost-effective solution for funding your next adventure. Unlock your dream vacations today and start creating memories that will last a lifetime.
Jamey Dodson, who joined the Bank in 2018, supervises residential lending operations at all locations. He has been in banking more than 30 years and has held positions at community and regional banks in business and mortgage lending, loan operations, and sales.
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