This post is written and sponsored by U.S. Bank.
Seems you’ve got a bit of a dilemma on your hands. That big project you’ve had in your head for what feels like forever is now actually coming together on paper and just waiting to be started. You have the time to do it and – best of all? – you want to do it. There’s just one problem. You need funds, because without them, your dream project stays on hold.
But fear not! If you’re a homeowner, and have equity in your home, you may have some options. One possible funding opportunity could be a second mortgage through access to your home equity. You may be able to take out what’s called a home equity line of credit (HELOC), or a home equity installment loan.
Unfamiliar with the idea of using your home‘s equity as collateral on a loan? No problem. Before you go any further with your plans, check out the Achieve Your Goals site. It’s a new financial resource from U.S. Bank. It’s a great resource with a variety of articles on financial topics such as home equity.
While the end result – access to funds – is essentially the same through both a home equity credit line and installment loan, and they both use your home as collateral, they are structured differently. So you’ll want to see which of these makes the most sense for your unique circumstances.
On the other hand, a HELOC or Home Equity Loan may not be the right move for you if:
- You plan on moving soon. You’ll need to pay back the line or loan when you sell your home.
- You might not be able to afford monthly payments. Remember your home is used as collateral.
The HELOC
With a U.S. Bank home equity line of credit, you may be able to borrow funds (up to the limit on your line of credit) on an as-needed basis to finance what you want, when you want, without having to reapply. For example: buying a new vehicle, consolidating debt or a starting a home remodeling project. There’s no need to reapply as the need for funds arises (as long as you don’t exceed your amount of credit). Also, HELOC interest rates tend to be lower than credit cards or unsecured loans.
Home equity loans
A home equity loan is essentially an installment loan. You apply for a specific loan amount and make monthly payments to pay it off. A home equity loan can be a great way to consolidate debt or pay for a one-time expense like that big project that’s begging to be finished. A U.S. Bank home equity loan can be a great way to go: competitive rates, low monthly payments and the bonus of potential.
With U.S. Bank you have home equity options. This makes getting a loan or line an even better choice!
good points and tips and information,,we worked hard over the years and doubled down on our payments and got our house paid off a few years ago,,that makes life so much easier as we get older
Thanks for the great link in the post here, awesome for resources of articles on financial topics, which i so need tips on and guidance.
This is great advice. We are about to do some major work on the house and a loan would really help!
We aren’t planning on any big changes to our home in the near future, but it’s great to know that there is a way to make it possible. One day, I’d love to add another bathroom.
A HELOC is such a good way to make home improvements on your house. Great info here!
We are not home owners yet but I look forward to the day we are and I can take on these fun and rewarding projects! Great tips. Thanks for sharing!!
Home equity is so important for so many reasons. We moved to a 15 year term on our mortgage a few years ago so we could get more equity in our home. It’s so nice to know that it is there if we ever need to borrow against it.
I think that HELOC can be a good option. I will be happy when I win the lottery and money is not an issue. 😉 (Wishful thinking – I know.)
There are so many awesome options out there to make a dream a reality. Our house is only 5 years old so no updating needed yet.. but I’m sure in the future we will need to do some remodeling – Glad to know I have options.
I think that Home Equity Loans pays for itself. When you use the line of credit to update or repair your home, your basically putting more equity into your investment. Thanks for the great info.
I’m currently a renter. However, I’ll definitely have to keep all of this in mind down the road!
Great tips. I love being a homeowner because I know that I’m not just throwing away my money every month on rent. Plus, building equity is a huge bonus. Can’t wait to check out this Achieve Your Goals site!
I love reading articles like this! We haven’t yet owned a home (apartment renters here), but I’m looking forward to the day when I can say, “We just bought a house.” Your information here is so valuable, thank you (in advance) for something I’ll need to know in the future! : )
I had recently been reading about seniors taking out a home equity loan, that it can be a good deal, that to have a paid off home with all the equity in it, it might be better to use a loan than tap other finances. Food for thought!