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Let your equity work for you

Home Equity Line of Credit*

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HELOCs and home equity loans are similar in that you're borrowing against the equity in your home. A home equity loan gives you a sum of money all at once, while a HELOC is similar to a credit card: You have a certain amount of money to borrow and pay back, but you can take what you need as you pay it. You'll pay interest only on the amounts you draw.

HELOCs often begin with a lower interest rate than home equity loans but the rate is adjustable, or variable, which means it rises or falls according to the movements of a benchmark. This means your monthly payment can rise or fall, too.

Home Equity Lines of Credit Pros and Cons

  • Pro: Pay interest compounded only on the amount you draw, not the total equity available in your credit line

  • Pro: May offer the flexibility of interest-only payments during the draw period

  • Con: Rising interest rates can increase your payment

  • Con: Without discipline, you might overspend, tapping out the equity in your home and finding yourself saddled with large principal and interest payments during the repayment period

*6 month introductory period on Home Equity Lines of Credit (HELOC) with minimum $5,000 new money required. Rates effective as of 5/13/2020 and are subject to change without notice. This is a variable rate loan. At end of introductory period the variable APR will be calculated using the Wall Street Journal Prime Rate (WSP) on Loan to Value (LTV) less than 80% or WSP + 1.0% on LTV more than 80% with a floor of 4.00%. WSP was 3.25 as of 5/13/2020. The maximum APR is 15% after the intro period ends. The HELOC must be secured by a first or second position mortgage on a primary or secondary, owner occupied residential property. Property insurance will be required. Subject to credit approval.

 

Home Equity Loan

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Home equity loans typically have a fixed interest rate, meaning the payment is the same each month; making it easier to factor into your budget. But remember, a home equity loan payment is in addition to your usual mortgage payment. Since it's a lump sum one-time equity draw, a home equity loan is a good source of money for major projects and one-time expenses.

Home Equity Loan Pros and Cons

  • Pro: A fixed interest rate

  • Pro: Monthly payments won't change and are for a set period

  • Con: Tapping all the equity in your home in one fell swoop can work against you if property values in your area decline

Consider using a Home Equity Loan or Line of Credit for:

  • Home improvements

  • Consolidating high-interest debt

  • Upcoming or unexpected expenses

  • Educational expenses

  • Refinancing existing debt

 

 

Contact a Personal Banker for complete details and additional information. Annual Percentage Rates (APRs) are subject to change without notice. Terms and conditions based on approved credit.

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