5 Reasons to Consider a Home Equity Line of Credit

Your home is your most valuable asset and investment. One of the benefits of ownership is the ability to take a loan out against the equity your home has accrued. This is called a home equity line of credit.

Your home’s equity can be determined by finding the difference between the fair market value of the property and the outstanding balance of all liens on it (typically your mortgage).

Equity increases as property values go up and you pay down your mortgage balance. A home equity line of credit then can provide many benefits for those with good credit and a chunk of their mortgage paid off.

Consider the Following

You can use it for big purchases. A home equity line of credit, which uses your home as collateral, frees up a large sum of money when it’s most needed and fills in any gaps in savings that you might have. It’s best for big projects such as major home improvements, college education costs, debt consolidation, and even a dream vacation.
You can borrow any sum up to your credit limit. Don’t feel comfortable with the total amount for which you’ve been approved? No worries; you can often just borrow up to what you need.
You’re protected from exorbitant interest rates. You may even be able to deduct the interest from your income taxes.
Your repayment is at your own speed, provided you meet the minimum. Unlike a mortgage, which can stretch on for 15 to 30 years, the home equity line of credit usually has a payment span of roughly 15 years. Lenders may allow you to pay more than the minimum to pay down the principal each month to minimize the impact of the interest.
Once you pay down your line, you may have it available for further use when you need it. Need to replace your roof after a particularly tough hurricane season? Have unexpected medical costs? If your home equity line allows for renewal after repayment, you can utilize the line a second time to cover unexpected costs or future projects.

Share:

Sign up for our newsletter and be the first to know about new tips, insights, and products from First Bank.

First Bank may use this email address to contact you about products, services, and promotions.

You may be interested in...

30-Year Mortgage Rate Forecast Tips A great way to lock in the best mortgage interest rate is to shop around. By learning how to read a 30-year mortgage rate forecast, homeowners can pinpoint an ideal loan. Here are some useful tips for understanding mortgage forecasts to take advantage of the current lending climate. Tips for Analyzing a 30-Year Mortgage Rate Forecast 30-year mortgages offer multiple benefits for home buyers, including lower monthly payments and fixed interest rates. Because it is a long-term investment, it is important to lock in a good rate. Here are some tips for interpreting the current climate of 30-year mortgage rates. Track Rates Over a Few Months A mortgage forecast is a collection of data from a period of time, usually a few months or a week. There are often forecasts for the year in January, but because the market is subject to change, it can be difficult to predict the lending climate. So, in order to find an ideal rate, it is best to track 30-year mortgage rate forecasts over a period of time (a few months) to determine if you should lock in your rate now or wait until later. Your First Bank mortgage advisor can provide informed advice on this issue as well, as they follow the fluctuations of mortgage rates and are trained to predict market behavior. Know What Affects Interest Rates There are a few factors that impact the lending climate in the United States: The Federal Reserve (responsible for adjusting the amount of money put into circulation) 10-Year Treasury Yield (the anticipated return on government investment and assets) Housing Market Climate (the supply and demand for financed housing) Lending Market (current credit rating averages and requirements for loans) Inflation (rising inflation correlates with rising mortgage rates) The combination of these factors changes mortgage rates day-to-day, depending on the economy. In the past few years, for example, economic factors caused mortgage rates to significantly drop. Now that the economy is growing again, interests rates are projected to rise. Current Forecasts Currently, 30-year mortgage forecasts are fluctuating between 3% and 5%. If you are hoping to buy or refinance a home this year in South Carolina or North Carolina, First Bank can help you lock in a 3 min read

Small Business Drives the US Economy Big businesses grab the headlines and often the glory when the economy is doing well, but it’s the small business owners are the true powerhouses behind economic improvements. 2 min read

Give Thanks for These 5 Thanksgiving Savings Tips Thanksgiving is in just a few weeks, but it's not too early to start shopping for the best deals on food, decorations, and beverages. If you're hosting a house full of friends and family, you don't have to spend a fortune to enjoy the holiday. 2 min read

Branch Spotlight: Combining Finance, Community Building, and Line Dancing in Florence, SC No team in banking understands the nuances of line dancing and banking quite like our Florence-Main branch. Join them for line dancing on Friday mornings! In March of 2023, we expanded our South Carolina footprint with the purchase of GrandSouth bank, adding 8 branches to the First Bank family. Our Florence-Main branch, operated by Paul Seward, Area Executive, and newly promoted City Executive, Ashley Christenbury, kicks off every Friday morning with some good old fashioned line dancing. You might think that line dancing and banking don’t have anything in common, but our team at the Florence-Main branch is here to prove you wrong. The choreography, methodical steps, camaraderie, and community-building aspects of line dancing have direct parallels with banking – and with First Bank specifically. Much like the choreography needed for a group to do the “Biker Shuffle” in unison, the moving parts needed to operate one of the nation’s most successful banks must work together seamlessly. First Bank’s mission combines financial safety and soundness with community trust and confidence. Throughout our organization’s 87-year history, we have seen recessions, depressions, and many banks come and go. Because of our commitment to being safe and sound and serving our customers, we have been awarded as a Number 1 Best-in-State Bank by Forbes, as an Annual KBW Bank Honor Roll Award winner, and one of the Top 10 best-performing public banks in the nation by S&P Global, along with many other accolades. The energy and teambuilding atmosphere cultivated at a line dance is hard to beat. As everyone works together, each dancer contributes to creating something larger than themselves. As the group grows in size and complexity, the more impressive the dance becomes. Similarly, banks that work together with their neighbors foster mutual growth, lasting impact, and impressive communities. An actively involved local bank can provide their neighbors with increased access to small business loans, mortgages, charitable donations, and overall financial wellness. When asked about her favorite part of working at First Bank, Ashley said, “First Bank’s commitment to the local communities we serve across our footprint is incredible. First Bank makes it a priority to support various initiatives on a corporate level and we are expected and encouraged to be involved 3 min read

5 Reasons to Consider a Home Equity Line of Credit (HELOC)

Ready to talk to an expert?

Consider the Following

Ready to talk to an expert?

You may be interested in...