A simple guide to a Home Equity Line of Credit (HELOC) – and the best ways to put it to work for you and your financial goals.
In the world of finance, acronyms are everywhere, and this one sounds particularly alien: HELOC. If you’ve never heard of it, or always wondered what the heck it means, your friends at Greylock have you covered.
HELOC is short for Home Equity Line of Credit. For most of us, our home is our most valuable asset, making equity (the value of your home minus any mortgages that you owe) a powerful tool for financial planning. With a HELOC, you can turn this asset into cash when you need it most.
“A HELOC is a revolving credit line that lets you borrow against your home’s equity as needed, with variable interest rates and flexible payment requirements that are similar to a credit card,” said Diana Telladira, AVP, Manager, Mortgage Origination at Greylock. “It’s ideal if you want access to funds over time, to consolidate debt, for upcoming projects, or to plan your next adventure.”
It's this flexibility that sets HELOCs apart from other types of personal loans – you can use the funds for anything. Here are some of the smartest ways to put a HELOC to use for short-term benefit and long-term gain.
Home Renovations
Fall is just around the corner with winter fast behind, making it a perfect time of year for dreaming up interior renovations that will make hibernation more enjoyable – and add value to your home. (Plus, home loan interest may be deducted at tax time. Talk to a tax professional for more info.) So, if you’ve been dreaming of an expanded kitchen, a four-season porch, or upgrading your bathroom, a HELOC can make your dream a reality.
Education Costs
College tuition is expensive. With so many competing priorities even the most diligent planners and savers can use a helping hand when it comes to education costs. A HELOC is an option to consider. While determined by your equity, HELOCs generally allow for large draws whenever you need the money, so if a tuition bill has you stressed, give Greylock a call.
Tackling Debt
High-interest credit cards can make keeping up with monthly payments and chipping away at debt a compounding challenge. A HELOC can help you consolidate and/or pay off what you owe at a lower interest rate. Speak with a Greylock loan officer today to see how a HELOC can help.
Emergencies
Life happens. Cars get rear-ended. Roofs develop leaks. Major appliances fail. HELOCs can cover these unexpected costs and more. It’s always good to save an emergency cushion – six months of living expenses is ideal – but when that’s not possible or when you don’t want to deplete your cash reserves, consider a HELOC to help you out of a jam.
Entrepreneurship
A lot of new business owners max out multiple credit cards when starting or expanding a business. That debt can weaken your financial stability. Cash from a HELOC can help pay for new equipment and the contractor who installs it. You might use the money for signage or to refresh décor or make your business more accessible. If it’s time to grow professionally, or if you’re ready to take the leap into entrepreneurship, make a HELOC a tool in your toolbox for success. Greylock is here to help.
These are only a few of the ways a home equity line of credit can assist you when you most need support, or when you want to use your home’s equity to improve your quality of life. You can learn more and apply online here or get in touch by phone or email and our financial experts will be happy to assist. And the next time you hear someone say, so what the heck is a HELOC, you’ll be in the know!