Use the equity you already own in your home to finance life’s unexpected expenses or projects. With Carson Bank, you have a partner with a legacy of service. We’ll help you pay for what matters most with a home equity line of credit, or HELOC loan.
Home Equity Line Of Credit (HELOC)
One of the many privileges of homeownership is tapping into the equity of your home. When we say “equity,” that’s the difference between your mortgage and your home’s actual value. As you pay down your mortgage, you build value in equity.
A home equity line of credit, allows you to access that equity you’ve built into your property over time. This is a source of revolving credit and works similar to a credit card.
Many homeowners use a HELOC to get funds as needed, since HELOCs typically provide interest rates lower than loans or credit cards. Interest rates are usually lower with HELOCs because the credit is secured by your home.
Carson Bank team will work with you to understand your financial situation and determine if a HELOC is the right choice for you.
How does a home equity line of credit work?
Homeowners can borrow up to 85% of their equity in their home with a HELOC. For example, say your home is worth $250,000. If you have $150,000 remaining on the mortgage, that means you’ve put $100,000 of equity into the home. Depending on your situation, you could qualify for up to an $85,000 line of credit on that equity.
But instead of receiving those funds as a lump sum, the HELOC is available to you on an as-needed basis, usually for a period of 10 years. You can access your funds through online transfer, writing checks or a card connected to your HELOC.
Another great feature? You only pay interest on the funds you actually use from your HELOC. Like a credit card, your HELOC has a borrowing limit, and you can’t exceed that limit. If you need to borrow more funds during your draw period, you’ll need to repay your outstanding balance to have more cash available to you.
After your draw period, you enter the repayment period. This usually lasts for 20 years, giving you the flexibility to pay off the HELOC over time.
The Benefits Of A Home Equity Line Of Credit
1. Get funds without a loan
If you want to pay for a wedding, vacation, renovation, car or another big expense, a home equity line of credit can get you funds on a revolving basis. Use your draw period to cover large expenses without taking a loan for every little thing. Since HELOCs have a longer draw period, you’re able to get the funds you need without reapplying for funding, like you would with a loan.
2. Consolidate debt
Some homeowners use their HELOC to consolidate high-interest debts because HELOCs tend to have lower interest rates.
High-interest rates make it difficult to become debt-free. However, HELOCs can help you consolidate that high-interest debt, paying off the debt quickly while enjoying a longer payback period on a HELOC.
3. Potentially save on taxes
Depending on your tax circumstances, you may be able to deduct the interest you pay on a HELOC. These rules can change from time to time, so consult your tax advisor for the most up-to-date information.
If you need access to extra cash over a period of several years, a HELOC can be a great way to put the equity in your home to work. There’s a lot to consider in choosing a HELOC, and Carson Bank is here to help you determine if this could be right for you.
Home equity line of credit requirements
HELOC eligibility hinges on a few factors. Depending on your income, credit score, employment history and other considerations, you may qualify for a HELOC.
We understand the process can feel overwhelming, and that’s why we’re here to help with each step. Talk to your Carson banker and chat about your goals and financial needs — we’ll create a plan together for your success. Because everything we do is rooted in our values, you can trust us to take a principled approach to modern banking.