by Cody Honse, Legends Bank
The past year has thrown a lot our way. Working from home or getting to stay home with our kids all day used to be something we all dreamed of until 2020 when it became a harsh reality. Our homes became our offices and our classrooms overnight it seemed, and our day-to-day business became a contactless or virtual experience. As a banker, our operations didn’t change much, but home loan volume increased significantly with the drop in interest rates last year. Consumer refinances hit record highs and customers are still taking advantages of low home loan rates.
Spring and Summer are quickly approaching and the freedom of getting to be outdoors again is coming with it. Like you, I’ve mostly been contained to work and home, and also like you, I’ve noticed home projects that need completed or improvements that could be made, or maybe you’ve decided it’s time to get that new furniture you’ve been dreaming about. While a cash-out refinance is a viable option, you should also consider a Home Equity Line of Credit.
Home Equity Line of Credit’s (HELOC) are a revolving line of credit secured by your home and is the most flexible type of home financing available. You can borrow as little as $10,000 or up to 80% of the value of your home depending on your credit history, available equity in your home, and your currently monthly debt. Interest rates for a HELOC are typically lower than other forms of credit such as unsecured loans or credit cards due to your home being used as the collateral which makes the risk to the bank lower. The interest you pay may even be tax deductible. Because of the competitive interest rates and tax advantages of a HELOC, they are great ways to finance almost anything including home improvements, purchasing an auto, buying a second property, consolidating higher interest rate balances, and even for education costs.
Closing costs for a HELOC are generally lower than a cash-out refinance and the time from application to closing is generally quicker as well, depending on your situation. Legends Bank also offers an option to lock in a fixed rate and term to help manage your payments. The locked amount would be fully amortized for the selected term. We also offer a repayment period when your initial draw period is over, so we take away the anxiety of wondering how you will repay the balance at maturity.
HELOC’s are a great option for those who owe little or nothing on their home. It is also a great option for anyone who has recently refinanced their home to take advantage of the lower interest rates and avoid the hassle of another 30 to 60 day closing and higher closing costs fees that could come with a new cash-out refinance. Once your HELOC funds are available, using the funds are just a check, or a click away on your phone.
Is it time to update that kitchen or remodel that bathroom? Maybe you or a teenager need a new or used auto, or have a senior who will be going off to college this summer and need some educational funds. Or maybe you don’t need anything right now, but you’re thinking that HVAC unit or water heater is getting close to its last leg. As we like to say, “the best time to get a HELOC is when you don’t need it”. Did your air conditioner just go out in your home or your car? No need to worry how to pay for that repair when you have a HELOC already set up and ready to go, and while you’re at it, why not lock in that amount with a fixed payment to pay off in a year. This spring, let Legends Bank help you treat your home to a little TLC, or help you treat yourself to that new living room set you’ve been eyeing for months with a Home Equity Line of Credit.
Cody Honse is a loan officer with Legends Bank, specializing in mortgage and consumer lending, with over a decade of banking experience. Legends Bank is a locally owned community bank, and has been serving the mid Missouri area for over 106 years.