Why Use a Home Equity Credit Line?
Many people think a home equity credit line is to be used solely for home improvements, but there are many other options.
Many people think a home equity credit line is to be used solely for home improvements, but this is only one option. There are a variety of reasons to use a credit line to access the equity in your home. Everyone’s situation is unique, but here are a few of them:
Home renovations are what most people think of when they apply for a home equity credit line. This is a great use. You can remodel a kitchen or bathroom, finish a basement or an attic, close in a porch, add a deck, or make any other upgrade to a room in your house.
Remodeling isn't the only type of home improvement you can make with a home equity credit line. Efficiency improvements can save you money in the long term.1 You can replace windows and doors with more efficient options, install insulation in your attic, or purchase smart devices that can help you regulate energy efficiency. Everything from smart thermostats to security systems are available to help you turn your regular home into a smart one. A home equity credit line can help you afford the upgrade.
Many people use a home equity credit line to consolidate their high-interest debt into a lower-rate, one-payment credit line. This can save you money, and it can make your life easier at the same time.
Lower interest on credit
Consolidating your debt when you have multiple sources is one thing, but it might be worth it to use a home equity credit line simply to pay off your credit card debt and move to a lower interest credit option.
Student loan relief
Similarly, you can use the credit line to help pay off your student loan debt, which is a major struggle for many Americans. CNBC reported in 2018: "Over 44 million Americans collectively hold nearly $1.5 trillion in student debt. That means that roughly one in four American adults are paying off student loans. When they graduate, the average student loan borrower has $37,172 in student loans, a $20,000 increase from 13 years ago."2
The College Investor3 says that if you can secure a fixed home equity credit line that has a rate lower than your student loan, it is worth the consideration of using your credit line to pay off the student loan. "You’ll probably save thousands in interest," it says.
Make a much-needed large purchase
Sometimes life throws major, unexpected expenses at us, and we're not always prepared for these. Whether you need money for major repairs to your home, vehicle, or anything else, a home equity credit line is a way to get a low-interest option that can help you take care of the matter quickly. Even if it's not an emergency, you may just have your eye on a significant purchase that's out of your price range. A home equity credit line can help you finance it.
Go on vacation
Not everyone is going to see taking a trip as the best use of a home equity credit line, but vacations can get very pricey, especially if you have a sizeable family. This may be the best option to help you pay for the trip you've wanted to take for some time.
Now may be your best time
With a home equity credit line from Nevada State Bank, you won't have any origination fees, closing costs, or third party fees. You'll get low interest-only payments as well as easy access with the ability to simply write a check, transfer online, or visit a branch.
Now through March 31, 2019, you can lock in a low 4.49% fixed APR4 for up to 10 years on all new Home Equity Credit Lines with our EquityLock Option.5 For more information, visit nsbank.com/hecl.
1. This related Two Cents article discusses how home repairs and improvements can add value to your home and help you reduce expenses.
4. Home Equity Credit Line: Loans subject to credit approval; terms and conditions apply. Offer is subject to change at any time. Minimum loan amount is $10,000. Minimum draw amount to avoid $30 fee is $500. Collateral must be owner-occupied, primary or secondary (no rentals) single family residential property, located in Nevada, with a maximum 85% Loan to Value. Properties for sale are not eligible. Property insurance is required, and other restrictions or conditions may apply. An early closure fee will apply if line is closed within 36 months of the initial loan closing date. Other loan options are available. Contact bank for full details.
5. EquityLock structured repayment option: Subject to credit approval. Terms and conditions apply. See a banker for full details. EquityLock structured repayment options are closed end, fully amortizing loans utilizing funds up to the maximum credit limit of your Home Equity Credit Line at a fixed 4.49% APR for up to 120 months (10 years). Minimum loan amount is $5,000. Requests will be honored during the promotional period only; expires March 31, 2019. Requests for an EquityLock addendum must be signed in branch. Funds may not be used to refinance an existing home equity credit line unless the home equity credit line limit is increased by $20,000 and the EquityLock is established for $20,000 more than the existing HECL payoff. A maximum of three EquityLock structured repayment options are allowed at any one time. The $25 conversion fee is waived during this promotional period. Any EquityLock requested after this promotional period will be subject to your Home Equity Credit Line Agreement terms and conditions. All other terms and conditions from your Home Equity Credit Line Agreement remain in effect.
The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank, a division of Zions Bancorporation, N.A. Member FDIC