Would you like to discover a simple and easy way to access cash based on the value of your home? A Home Equity Line of Credit, or HELOC, is a type of loan that allows homeowners to borrow money against the equity in their home. The difference between your home’s value and the amount you still owe on your mortgage is used as collateral. If you own a home and it’s worth more than the remaining balance on your mortgage, you have equity. If you have equity, you can apply for a Home Equity Line of Credit.

With a HELOC, you are provided with a predetermined credit limit, similar to that of a credit card. Homeowners have access to draw on that limit for a period of ten years (draw period). After the draw period ends, the loan switches into the repayment period. During the repayment period, the homeowner pays any remaining balance on the line over a fixed period of time. The flexibility of a HELOC is also a huge advantage. A HELOC has a revolving balance. Borrow what you need, depending on your home’s equity, pay it off, and then borrow against it again. You will have ongoing access to these funds.

Applying for a HELOC may seem daunting, but that is why we are here. To help pique your interest in the simple process, here are a few frequently asked questions:

How much can I borrow?

Depending on the value of your home, you may be able to borrow up to 90% of its value. 

Can the interest on a HELOC be deducted from taxes?

The interest you pay the credit union on a home equity line of credit may be deductible; however, you should consult a tax advisor or accountant for more information.

What is the application process for a HELOC?

Starting the process is easy! Just call or visit one of our conveniently located branches to complete the simple application process. Documents that you may be required to provide include proof of income, current mortgage statement, proof of insurance and any statements for debts you want to pay with the HELOC. 

What can a HELOC be used for?

    Renovate an outdated kitchen, add a deck or pool to the backyard, or even remodel an old bathroom. You are limited only by your imagination.
    Most people have accumulated some credit card debt over the years. The home equity line of credit can be used to pay off high-interest credit cards and consolidate debt into one manageable monthly payment. Not only would this save you money in interest, but it could also help improve your credit score.
    Unexpected expenses can arise at any time in life. You have peace of mind knowing you have access to funds in case of an emergency if you have a home equity line of credit. Whether you need to cover medical expenses, car repairs, or the loss of a job, a HELOC is a reliable safeguard.
    Your child’s education will likely be one of the most significant expenses in your lifetime. A HELOC can be used to pay for college tuition or any other educational expenses. Take steps today to ensure your children have the best education possible.
    HELOCs are a better option than credit cards for financing a long-awaited vacation. You’ve worked hard, now play hard. As opposed to a credit card which is an unsecured debt, a home equity line of credit is a secured loan and therefore may have lower interest rates. 

So many possibilities to consider. Why not stop by one of our convenient offices and talk to one of our knowledgeable team members? 

Don’t forget, simply by applying you are entered into our sweepstakes for a chance to win $500 in cash. Official rules are available online or in person. You don’t need to purchase anything or be a VLFCU member to enter or win, so stop by today!