As real estate values rise, many of you may be asking yourself if a HELOC, or Home Equity Line of Credit, is the best option for home expenses. After all, the interest can be deducted off your taxes if the funds are used for home improvements. What you may not know is that this line of credit could also help you pay down debt, take that dream vacation…the sky’s the limit!
A Home Equity Line of Credit is essentially the part of your property that you own. Because of this, you are able to take out a loan for a predetermined amount over a length of time. Like a mortgage, you would have a monthly payment, opting to pay toward just interest or interest and principal.
Calculating the amount of equity you have in your home is simple. Take the value of your home and multiply it by .90 to get 90% of its current value. Then subtract the amount you still owe (mortgage) from your answer. This will give you the amount that should be available to you for a HELOC. For example, if your home is worth $100,000 and you owe $60,000 on it still, you would calculate the value using the following formula:
Equity = ($100,000 x 0.90) – $60,000
= $90,000- $60,000
Equity = $30,000
If you are considering a Home Equity Line of Credit, then you are in luck! PSCU has a limited time offer. You can use the equity in your home to get the cash you need at just 1.99% APR* until 2020! Our knowledgeable staff is here to assist you in the decision-making process. We have the tools and know-how to make the process simple and get cash in your hand in no time. Contact us or visit one of our 15 locations to learn more and start your application today!
*APR= Annual Percentage Rate. Subject to credit approval and program guidelines. This offer applies only to new home equity line of credit loans or existing ones that have a $0 balance as of October 15th, 2019. Only on a primary residence property, which the borrower owns and occupies is eligible; not available on a second/vacation home, rental/investment properties, or mobile homes. Offer limited to residences of Michigan. Your rate and corresponding APR may be higher than the advertised special rate, depending on your credit history and PSCU’s credit policies. The home equity line of credit is available for owner-occupied, primary residence properties with an 90% or lower combined loan-to-value (LTV) ratio. Property insurance is required. Flood insurance may be required. The introductory Annual Percentage Rate (APR) of 1.99% will remain in effect until December 31st, 2019. After the introductory rate period ends, any and all remaining balances will automatically revert to the variable rate you are eligible for based on your credit score at the time of application. This product has a variable-rate that is based on the market rates (prime plus margin).