You might have heard the word “equity” thrown around here or there and being able to use it to fund different projects or fulfill financial needs—but what is equity?
Simply put, it's the difference between what you owe on your home and your home's fair market value.
You can get what's called a Home Equity Line of Credit, or HELOC, which is a line of credit, much like a credit card, that uses the equity in your home as collateral. Chances are you'll get a much better rate using a HELOC to fund things like a home renovation, college fund, family vacation, debt consolidation—or whatever you want—as compared to a personal loan or credit card.
During the application process, an appraisal of your home will be done to determine your home's value. Then you can work with a knowledgeable lender at Extra Credit Union to complete your application process and determine the amount of the loan.
The HELOC is an open-ended line of credit, so you can use as much or as little as you need, depending on the amount that was approved. Stipulations vary based on your financial institution, but at Extra Credit Union, our HELOC is a variable-rate loan, so your monthly payment will vary based on the prime rate and balance of your loan.
At Extra Credit Union, you can use the loan funds for five years and take up to 20 years to repay the loan. Minimum payments are as low as 1 percent of the outstanding balance each month or $50—whichever is greater.
So if you own a home, have some equity and need extra cash—apply for a HELOC today!
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