If you’ve been able to build equity in your home, that’s an asset you can borrow against in order to make home improvements, provide educational opportunities for your children, consolidate debt or finance a start-up business.
Understanding HELOCs
A HELOC is a type of loan that allows you to borrow against the equity in your home. It’s a revolving line of credit, meaning you can borrow as much as you need, up to the credit limit, as you repay the balance.
Benefits of HELOCs
- Flexibility: Unlike a traditional loan, a HELOC allows you to borrow as little or as much as you need up to your credit limit.
- Lower Interest Rates: HELOCs typically have lower interest rates than credit cards and personal loans.
- Potential Tax Deductions: The interest you pay on a HELOC may be tax-deductible if you use the funds to buy, build or substantially improve your home.
