Maybe your checking account doesn’t have enough cash to pay for a swimming pool in the backyard or that big vacation you’ve always wanted to take. But guess what? Your house might have more than enough equity to cover the cost of home improvements, a special trip and then some.
Even as many homeowners feel cash-strapped due to inflation, a near-record number of them are now “equity-rich” due to surging home values. A home equity loan or line of credit through Honor Credit Union is a quick and easy way to tap that cash without having to sell your home or refinance your mortgage.
“Typically, our home equity products are used for home improvements or renovations,” said Robin Dykema, Home Equity Manager for Honor Credit Union. “Vacation is another big one in the summer, and in the fall it’s ‘My kid needs college tuition.’
“We look at it as your home’s cash. You can use it for whatever you want.”
Two Ways To Unlock Your Home’s Cash
Honor Credit Union provides both home equity loans and home equity lines of credit. So, which one is right for you?
With a home equity loan, you get a lump sum of money upfront, then pay it back at a fixed rate over a specific term. For example, maybe you take out a $50,000 home equity loan to pay for windows and siding (and a hot tub, too!). You’ll get $50,000 added to your checking account immediately, and then you’ll repay the loan over time with a set monthly payment.
“I compare it to an auto loan,” Dykema said. “The home equity loan is going to disburse all at once, and once you’ve paid it off then it’s closed.”
With a home equity line of credit, or HELOC, you get approved for a certain amount of credit based on your home equity and then you access the cash as needed. For example, let’s say you get a $50,000 home equity line of credit this summer to put a swimming pool in your backyard, but your contractor can’t do the job until 2026. No worries. You won’t make any payments or incur any interest until you actually draw any money on your line of credit.
Once you start drawing money, you only make payments on that amount – not the full $50,000. Because the money can be transferred to your checking account at different times and in different amounts, the interest rate can change over time and your monthly payments can fluctuate.
“The HELOC is like a credit card,” Dykema said. “You’re only making a payment on what you use.”
Other Ways To Use A Home Equity Loan Or Line Of Credit
Looking to overhaul your landscaping yet this summer, put up a fence or build a gazebo? Maybe you want to get a boat or jet ski to play with while the water is still warm. Those are all things you could do with a home equity product from Honor Credit Union.
Here’s a look at a few other common uses of a home equity loan or line of credit:
- Debt Consolidation – Take high-interest credit card debt or other loans and combine them all into a home equity loan with a single, easy monthly payment at a lower rate
- Special Occasions – Whether you have a big anniversary coming up, a wedding to pay for or a baby on the way, a home equity loan or line of credit can take the financial stress out of life’s biggest moments by freeing up some of your home’s cash
- Unforeseen Emergencies – You never know when your air conditioner or furnace might go out. Many people get a line of credit just in case they need it someday. There’s no annual fee for keeping a HELOC open at Honor Credit Union, and the interest rate is much lower than on a credit card or personal loan.
How To Apply And Get Cash Fast
You can quickly apply for a home equity loan or line of credit online, over the phone or in person at your local Honor Credit Union branch. After a credit check and calculation of your debt-to-income ratio, you’ll have access to your home’s cash in 7 to 10 days – as much as 90% of your home’s value!
Once you close on a home equity loan, you’ll have a lump sum of money to use however you like. And if you close on a home equity line of credit, you can use Honor’s mobile app or online banking to transfer money into your checking account whenever you need it. You can even use a debit card linked to your HELOC.
Home Equity Loan
Apply for a home equity product from Honor Credit Union today and see what your home’s cash can do for you!
