How your home equity can make your dreams come true

Last updated on
by Prospera Credit Union
in Post Catgories: Home Loans

If you’re at a point in life where you own your home but are looking to finance the next stage of your life, a home equity loan or home equity line of credit (HELOC) could be the solution you’re looking for. These can be used to fund a variety of expenses, including home improvement projects, vehicles, education tuition or big expenditures like a dream vacation or a wedding. They can also be used to help with debt consolidation.

How home equity works

In simple terms, a home equity loan uses the borrower’s home as collateral. The amount one can borrow is determined by the value of the property, taking into account any current loans against the property. Many credit unions, including Prospera Credit Union, offer affordable home equity loans and HELOCs for up to 80 percent of the home’s value.

If you have a specific need, you can use a home equity loan to borrow a fixed amount of money and pay it back with scheduled payments for a set length of time (usually up to 20 years). The other home equity option, a HELOC, provides borrowers with the flexibility to borrow funds when needed. When you apply for a HELOC, you’ll be approved for a total dollar amount based on the equity in your home. You can then transfer funds from your line of credit (up to your credit limit) right into your checking account when you need extra cash – no questions asked. What’s more, the interest on home equity loans and HELOCs are often tax deductible (see your tax advisor for details)!

Taking out a home equity loan or HELOC from a credit union means you’ll get local approval with personalized, flexible terms and service, and benefit from features like automatic payments and free online account access and e-statements. You can help protect your family’s best interest in the event of an unforeseen circumstance with payment protection, which is offered for your home equity loan in the event of death, disability or the inability to work due to illness or injury. In addition, most credit union lenders offer bi-weekly payment options and no prepayment penalties.

Whatever your next stage of life is, home equity loans and HELOCs can help you finance what you dream of doing. To learn more about how your home can help you reach your goals, contact us.