Use your HELOC loan as an alternate funding source
A home equity line of credit, or HELOC, provides you with a revolving line of credit backed by your home’s equity, which is the difference between your home’s value and the remaining balance on the mortgage. The amount of credit varies based on the amount of equity you’ve built up. On average, financial institutions lend up to 85% of your equity as long as your credit score is at least 640.
Is a HELOC right for you?
A HELOC is an excellent choice for funding home improvement projects because they have the potential to improve or maintain the value of your home. HELOCs can also be used as an alternative source of funding, similar to a credit card. Like a credit card, a HELOC is a revolving line of credit, meaning that you can borrow money, pay off the loan, then borrow again. But HELOCs feature several advantages over credit cards. Since your home’s equity is used to secure a HELOC, you’ll typically enjoy lower interest rates than even the most competitive credit cards on the market. For example, Vantage West currently offers HELOCs starting at 5% Annual Percentage Rate (APR).
Using a HELOC to make certain purchases may qualify you to receive tax benefits unavailable to credit card consumers. This can result in savings come tax time. Be sure to consult your tax advisor to determine tax deductibility guidelines.
Transferring credit card debt to a HELOC
A HELOC can help ease the burden of credit card debt through a balance transfer. By moving your credit card balance to your HELOC, you may enjoy lower interest rates. But before you make the transfer, it’s important to evaluate the source of your credit card debt. Consider also that using your HELOC for debt transfer will tie up your home’s equity that you might otherwise be able to use to make home improvements that you can enjoy for many years to come.
Factors to consider when selecting a HELOC lender
While using a HELOC as a funding source has many advantages, there are some caveats to consider. Most HELOC lenders charge fees that can run up to several hundred dollars. Analyze your HELOC agreement closely to determine if it makes financial sense for your situation. Vantage West Credit Union offers reasonable terms and a low $50 annual fee that is more reasonable than the $95 that the average credit card company charges. With no origination fees*, points, application fees, or closing costs, a HELOC with Vantage West offers a great option for many homeowners.
Reasons to consider a HELOC
Whether you want to fund home improvements that can bring you years of satisfaction or you simply need an alternative source of funding, a home equity line of credit is a good option to consider.
Vantage West offers HELOCs starting at $10,000 for Arizona homeowners. These lines of credit can be used to renovate your house, to fund your education, or as overdraft protection for your other Vantage West accounts. You can access your HELOC with a Home Equity Visa® Card. You can also transfer funds through our Online Banking and PhoneBank systems, or through our mobile app.
Visit VantageWest.org or call (800) 888-7882 to learn more about available home equity loan products.
Loans subject to approval. Rate based on LTV and creditworthiness. Certain restrictions and fees may apply. Rates are variable and subject to change. Variable rate maximum: 17.99%. Property insurance is required. Consult a tax adviser for tax deductibility guidelines. *Loan must remain open for a minimum of 2 years to avoid repayment of origination fees. NMLS# 485751