Publish Date: May 20, 2022
Here at Fidelity Bank & Trust, we may not be fortune tellers, but what if we told you we could help you be prepared for anything?! Yes, ANYTHING.
“A Home Equity Line of Credit (HELOC) allows you to get a loan using the equity in your home as collateral and works similarly to a credit card once in place,” said Beth Toenjes, Assistant Vice President of Retail Loans at Fidelity Bank & Trust. “Although HELOC has the word ‘home’ in it, you can use the borrowed money for anything you need. If you think you might be interested in a HELOC, it’s a good idea to work with a lender ahead of time. Then once you have the loan in place, all you need to do is login to online or mobile banking and transfer money from your HELOC to your checking for the funds to be available immediately,” recommended Toenjes.
Toenjes details 3 myths about HELOCs and why one might be right for you:
MYTH #1: HELOCs HAVE TO BE USED ON YOUR HOME.
BUSTED: HELOCs CAN BE USED FOR ANY FINANCING NEEDS.
The word ‘home’ in reference to a HELOC is simply because it allows you to obtain money using the equity in your home as collateral. Funds from your HELOC can be used to purchase a vehicle, college expenses, vacations, home improvements…the possibilities are endless. In today’s ever-changing economy with high inflation, a HELOC may be right for you because it’s an inexpensive financing option with low closing costs.
MYTH #2: HELOCs HAVE TO BE USED ALL AT ONCE.
BUSTED: HELOCs WORK SIMILARLY TO A CREDIT CARD IN THAT YOU CAN USE SOME OR ALL OF THE AVAILABLE LOAN AMOUNT.
A HELOC is what we call a revolving line of credit, which means you can borrow and pay back the loan as many times as you would like. Unlike a traditional loan, you advance the funds from your set limit, and your payments are reflected on the amount borrowed from your limit.
MYTH #3: HELOCs HAVE A HIGH MONTHLY PAYMENT.
BUSTED: HELOC PAYMENT OPTIONS ARE BASED ON YOUR QUALIFICATIONS.
At Fidelity Bank & Trust, HELOC payments can be interest only, 1% or 2% of your loan balance depending on which program you qualify for. Learn more about what you may qualify for by talking with your local lender.
If you think a HELOC may be right for you, find a lender or stop by Your Hometown Bank to learn more!