Demystifying Home Equity Lines of Credit
While there are plenty of resources that explain what a home equity line of credit (or HELOC) is and what you can use it for, you’re not alone if you still have questions.
First of all, it’s important to note that oftentimes, financial decisions are also emotional ones – particularly when we feel that the stakes are high.
When it comes to HELOCs, terms like home equity and second mortgage can sound both mysterious and intimidating – which can cause us to question our confidence when it comes to making the best financial decision. We may fall into old habits or rely on more familiar forms of credit rather than wading into unfamiliar territory. While this can seem easier, it’s not always in your best interest.
Do I need a HELOC?
Tapping into your home’s equity can be a great way to fund large purchases, including home renovation projects, weddings, education expenses and medical bills. If you know you’ll have such an expense in the future, a HELOC can help you access the money to pay for it – usually at a much lower rate than a credit card.
Is there a downside to tapping into my home equity?
The prospect of putting up your home equity as collateral on a loan can certainly give you pause. When seeking a HELOC, that is essentially what you’re doing.
How exactly do I use my HELOC?
You’ll have access to the funds on the fourth business day after you've been approved for a HELOC. The line of credit will show up right in your UW Credit Union Web Branch, and you can begin making transfers to various accounts right away.
How can I apply?
If you’re ready to pursue a HELOC, UW Credit Union makes applying easy. All you’ll need is some information about yourself, any joint applicants, your existing mortgage and your home value.