{"id":7120,"date":"2019-06-03T21:13:03","date_gmt":"2019-06-04T04:13:03","guid":{"rendered":"https:\/\/financer.com\/?p=7120"},"modified":"2024-11-27T21:02:43","modified_gmt":"2024-11-28T05:02:43","slug":"home-equity-line-of-credit","status":"publish","type":"page","link":"https:\/\/financer.com\/loans\/home-equity-line-of-credit\/","title":{"rendered":"Home Equity Line of Credit"},"content":{"rendered":"\n<p>It&#8217;s a lazy Sunday afternoon. You&#8217;re sipping coffee, scrolling through home renovation ideas on your phone. Suddenly, it hits you &#8211; <strong>that dream kitchen remodel doesn&#8217;t have to remain a dream<\/strong>. But your savings account is looking slim, and your credit card limit won&#8217;t cover even half the cost.<\/p>\n\n\n\n<p>You type into Google: &#8220;<strong>Home Equity Line of Credit<\/strong>&#8221; and if you&#8217;re lucky, you land here.<\/p>\n\n\n\n<p>Why lucky?<\/p>\n\n\n\n<p>Because our team is committed to cutting through the financial jargon and providing you with honest, straightforward advice on HELOCs.<\/p>\n\n\n\n<p>And here&#8217;s a further disclosure: in the vast sea of HELOC offers, <strong>we&#8217;ve done the heavy lifting to bring you only the most reputable lenders and the best rates available in December 2024.<\/strong><\/p>\n\n\n\n<p>Whether you&#8217;re planning a home renovation, consolidating high-interest debt, or need funds for an unexpected expense; a home equity line of credit can be a game changer.<\/p>\n\n\n<div class=\"fn_block block_fn_msg_box company\"><div class=\"fn_block__icon\"><\/div><h3>Our Picks for Best Home Equity Lines of Credit in December 2024<\/h3><p><strong>Best Overall: Bank of America<\/strong><br>Offers competitive rates, no application or closing fees, and rate discounts for existing customers.<\/p>\n\n<p><strong>Best for Low Fees: U.S. Bank<\/strong><br>No closing costs and flexible repayment terms make this an affordable option for many homeowners.<\/p>\n\n<p><strong>Best for Long Draw Period: Connexus Credit Union<\/strong><br>Features a generous 15-year draw period and low introductory rates.<\/p>\n\n<p><strong>Best for High Loan Amounts: PenFed Credit Union<\/strong><br>Offers HELOCs up to $1 million with competitive rates and discounted closing costs.<\/p>\n\n<p><strong>Best for Fast Approval: Figure<\/strong><br>Provides a streamlined online application process with potential approval in minutes.<\/p><\/div>\n\n\n<h2 class=\"wp-block-heading\" id=\"What_is_a_Home_Equity_Line_of_Credit_HELOC\">What is a Home Equity Line of Credit (HELOC)?<\/h2>\n\n\n\n<p>A Home Equity Line of Credit (HELOC) is a revolving line of credit secured by your home&#8217;s equity. Unlike a traditional home equity loan that provides a lump sum, a HELOC allows you to borrow as needed up to a predetermined credit limit, similar to a credit card.<\/p>\n\n\n<div class=\"fn_block block_fn_msg_box boxed\"><div class=\"fn_block__icon\"><\/div><h3 id=\"Key_Features_of_HELOCs\">Key Features of HELOCs:<\/h3><ul>\n<li>Flexible borrowing: Draw funds as needed during the draw period<\/li>\n<li>Lower interest rates compared to unsecured loans or credit cards<\/li>\n<li>Interest may be tax-deductible (consult your tax advisor)<\/li>\n<li>Variable interest rates that can fluctuate with market conditions<\/li>\n<li>Your home serves as collateral for the loan<\/li>\n<\/ul><\/div>\n\n\n<h2 class=\"wp-block-heading\" id=\"How_HELOCs_Work\">How HELOCs Work<\/h2>\n\n\n\n<p>A HELOC typically consists of two phases:<\/p>\n\n\n\n<ol>\n<li><strong>Draw Period:<\/strong> Usually 5-15 years, during which you can borrow up to your credit limit. You&#8217;ll generally only pay interest on the amount borrowed.<\/li>\n\n\n\n<li><strong>Repayment Period:<\/strong> Usually 10-20 years, where you repay both principal and interest on the borrowed amount.<\/li>\n<\/ol>\n\n\n\n<p>Most lenders allow you to borrow up to 85% of your home&#8217;s value, minus your outstanding mortgage balance. This is known as the combined loan-to-value (CLTV) ratio.<\/p>\n\n\n<div class=\"fn_block block_fn_msg_box company\"><div class=\"fn_block__icon\"><\/div><h3 id=\"Example_HELOC_Calculation\">Example HELOC Calculation:<\/h3><p>Home Value: $400,000<\/p>\n<p>Outstanding Mortgage: $250,000<\/p>\n<p>85% of Home Value: $340,000<\/p>\n<p>Potential HELOC Amount: $340,000 &#8211; $250,000 = $90,000<\/p><\/div>\n\n\n\t\t<div id=\"genericloan_0_form\" class=\"fs-slider fs-slider--tooltip search-hero--bg1\"><h3>Compare loans from 79 lenders<\/h3><p>Find the cheapest rate with one click<\/p><div class=\"step amount\">    <div class=\"slider_cont step__value\">\n        <span class=\"fl_l_m_15 amount_display\"><\/span>\n    <\/div>\n    <div class=\"step__slider\">\n        <input type=\"range\" data-default-value=\"500\" data-name=\"param_amount\" \/>\n    <\/div>\n<\/div><div class=\"step stepSubmit\"><a id=\"submitSliders\" href=\"https:\/\/financer.com\/results?query=1&non_affiliate=true&param_amount=500&loan_broker_filter_active=true&param_period=360\" data-slider-url=\"https:\/\/financer.com\/results?query=1&non_affiliate=true&param_amount=500&loan_broker_filter_active=true&param_period=360\" data-required=\"results?query=1non_affiliate=true&param_amount=500&loan_broker_filter_active=true&param_period=360&\" class=\"get_results compare button is-primary is-medium is-rounded\">Compare Offers<\/a><\/div>\t\t<\/div><h2 class=\"wp-block-heading\" id=\"HELOCs_vs_Other_Home_Equity_Options\">HELOCs vs. Other Home Equity Options<\/h2>\n\n\n\n<p>To help you understand if a HELOC is the right choice, let&#8217;s compare it to other home equity borrowing options:<\/p>\n\n\n\n<figure class=\"wp-block-table is-style-stripes shortcode-no\"><table><thead><tr><th>Feature<\/th><th>HELOC<\/th><th>Home Equity Loan<\/th><th>Cash-Out Refinance<\/th><\/tr><\/thead><tbody><tr><td>Interest Rate<\/td><td>Variable<\/td><td>Fixed<\/td><td>Fixed<\/td><\/tr><tr><td>Funds Disbursement<\/td><td>As needed<\/td><td>Lump sum<\/td><td>Lump sum<\/td><\/tr><tr><td>Repayment Terms<\/td><td>Interest-only during draw period, then principal + interest<\/td><td>Fixed payments over 5-30 years<\/td><td>New mortgage terms (15-30 years)<\/td><\/tr><tr><td>Best For<\/td><td>Ongoing expenses, flexible borrowing needs<\/td><td>Large, one-time expenses<\/td><td>Lowering overall mortgage rate<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"Current_HELOC_Rates_and_Trends\">Current HELOC Rates and Trends<\/h2>\n\n\n\n<p>As of December 2024, HELOC rates are averaging around 8.45% APR, with expectations to potentially decrease by the end of 2024. However, rates can vary significantly based on factors such as credit score, loan amount, and lender.<\/p>\n\n\n<div class=\"fn_block block_fn_msg_box key-takeaways\"><div class=\"fn_block__icon\"><\/div><h3 id=\"Factors_Affecting_HELOC_Rates\">Factors Affecting HELOC Rates:<\/h3><ul>\n<li>Credit score (aim for 700+ for best rates)<\/li>\n<li>Combined loan-to-value (CLTV) ratio<\/li>\n<li>Debt-to-income ratio<\/li>\n<li>Current market conditions<\/li>\n<li>Relationship with the lender<\/li>\n<\/ul><\/div>\n\n\n<h2 class=\"wp-block-heading\" id=\"Top_HELOC_Lenders_in_fn_date_formatY\">Top HELOC Lenders in 2024<\/h2>\n\n\n\n<p>Here&#8217;s a comparison of some of the best HELOC lenders based on our research:<\/p>\n\n\n\n<figure class=\"wp-block-table is-style-stripes shortcode-no\"><table><thead><tr><th>Lender<\/th><th>APR Range<\/th><th>Key Features<\/th><\/tr><\/thead><tbody><tr><td>Bank of America<\/td><td>Starting at Prime + 0.75%<\/td><td>Discounts for existing customers, no application or closing fees<\/td><\/tr><tr><td>U.S. Bank<\/td><td>8.95% &#8211; 13.1%<\/td><td>No closing costs, flexible repayment terms<\/td><\/tr><tr><td>Connexus Credit Union<\/td><td>Starting at 7.56%<\/td><td>Low introductory rates, 15-year draw period<\/td><\/tr><tr><td>PenFed Credit Union<\/td><td>Starting at Prime + 0.99%<\/td><td>Discounted closing costs, high maximum loan amounts<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>Remember to shop around and compare offers from multiple lenders to find the best HELOC for your needs.<\/p>\n\n\n\n                <div class=\"fn_block block_fn_msg_box cost search-hero--bg1\">\n\t\t\t\t<h3>How to save <span class=\"compare-amount\">$619.00 <\/span> on your loan<\/h3>\n\t\t\t\t<p>The price difference for a $500.00 loan in 90 days is $619.00.<\/p>\n\t\t\t\t<p class=\"has-text-left\"><a href=\"https:\/\/financer.com\/results\/?query=1&filter_non_affiliate=1&param_amount=500&param_period=90\" class=\"button is-normal is-primary is-rounded\">Find out how<\/a><\/p>\n                <\/div><h2 class=\"wp-block-heading\" id=\"Pros_and_Cons_of_HELOCs\">Pros and Cons of HELOCs<\/h2>\n\n\n<div class=\"fn_block block_fn_pros_cons\"><ul class=\"like\"><h3 id=\"Pros_of_HELOCs\">Pros of HELOCs<\/h3><li><p>Flexible access to funds as needed<\/p>\n<\/li><li><p>Lower interest rates compared to credit cards or personal loans<\/p>\n<\/li><li><p>Interest may be tax-deductible for home improvements<\/p>\n<\/li><li><p>Only pay interest on the amount borrowed<\/p>\n<\/li><li><p>Potential for rate drops in 2024<\/p>\n<\/li><\/ul><\/div>\n\n<div class=\"fn_block block_fn_pros_cons\"><ul class=\"dislike\"><h3 id=\"Cons_of_HELOCs\">Cons of HELOCs<\/h3><li><p>Variable interest rates can lead to payment fluctuations<\/p>\n<\/li><li><p>Risk of overspending due to easy access to funds<\/p>\n<\/li><li><p>Your home is used as collateral, risking foreclosure if you default<\/p>\n<\/li><li><p>Potential for higher rates if market conditions change<\/p>\n<\/li><li><p>Some lenders charge annual or inactivity fees<\/p>\n<\/li><\/ul><\/div>\n\n\n<h2 class=\"wp-block-heading\" id=\"How_to_Choose_the_Best_HELOC\">How to Choose the Best HELOC<\/h2>\n\n\n<h3 id=\"Steps_to_Find_the_Best_HELOC\">Steps to Find the Best HELOC<\/h3><div class=\"howto_desc\"><p>Follow these steps to secure the best HELOC for your needs:<\/p><\/div><div class=\"single-article__steps\">        <style>\n            .single-article__steps-items .single-article__steps-content {\n                background: #FFFFFF;\n                padding: 30px;\n                margin: 0 0 30px 0;\n                border-radius: 10px;\n                box-shadow: 0 0 10px 0 rgba(0, 0, 0, 0.14);\n                width: calc(100% - 5px);\n            }\n            .single-article__steps-items .single-article__steps-counter {\n                padding: 5px 20px;\n                border-radius: 3px;\n                background-color: #F5E7D8;\n                display: inline-block;\n                top: 15px;\n                left: -30px;\n                position: relative;\n                font-size: 16px;\n                font-weight: 600;\n            }\n\/*            .single-article__steps-items::before {\n                content: \"\";\n                position: absolute;\n                top: 20px;\n                left: 0;\n                height: calc(100% + 40px);\n                border-left: 2px dashed #e0e0e1;\n            }*\/\n            .single-article__conclusion-tag {\n                padding: 5px 20px;\n                border-radius: 3px;\n                color: #000000;\n                background-color: #F5E7D8;\n                display: inline-block;\n                top: 15px;\n                left: -30px;\n                position: relative;\n                font-size: 16px;\n                font-weight: 600;\n            }\n            .single-article__conclusion-item {\n                background: #FFFFFF;\n                padding: 30px;\n                margin: 0 0 30px 0;\n                border-radius: 10px;\n                box-shadow: 0 0 10px 0 rgba(0, 0, 0, 0.14);\n            }\n        <\/style>\n        <div class=\"single-article__steps-items\"><div class=\"single-article__steps-counter\" id=\"step_1\">Step 1<\/div><div class=\"single-article__steps-content\"><h3 id=\"Check-Your-Credit-Score\">Check Your Credit Score<\/h3><p>Aim for a score of 700 or higher for the best rates.<\/p><\/div><div class=\"single-article__steps-counter\" id=\"step_2\">Step 2<\/div><div class=\"single-article__steps-content\"><h3 id=\"Determine-Your-Homes-Equity\">Determine Your Home&#8217;s Equity<\/h3><p>Calculate your CLTV ratio to understand how much you can borrow.<\/p><\/div><div class=\"single-article__steps-counter\" id=\"step_3\">Step 3<\/div><div class=\"single-article__steps-content\"><h3 id=\"Shop-Around\">Shop Around<\/h3><p>Compare offers from at least 3-5 lenders, including banks, credit unions, and online lenders.<\/p><\/div><div class=\"single-article__steps-counter\" id=\"step_4\">Step 4<\/div><div class=\"single-article__steps-content\"><h3 id=\"Consider-Introductory-Offers\">Consider Introductory Offers<\/h3><p>Look for low introductory rates, but be aware of how rates may change after the promotional period.<\/p><\/div><div class=\"single-article__steps-counter\" id=\"step_5\">Step 5<\/div><div class=\"single-article__steps-content\"><h3 id=\"Review-Fee-Structures\">Review Fee Structures<\/h3><p>Pay attention to annual fees, closing costs, and early termination fees.<\/p><\/div><div class=\"single-article__steps-counter\" id=\"step_6\">Step 6<\/div><div class=\"single-article__steps-content\"><h3 id=\"Understand-Repayment-Terms\">Understand Repayment Terms<\/h3><p>Consider the length of the draw and repayment periods, and how payments may change over time.<\/p><\/div><div class=\"single-article__steps-counter\" id=\"step_7\">Step 7<\/div><div class=\"single-article__steps-content\"><h3 id=\"Read-the-Fine-Print\">Read the Fine Print<\/h3><p>Carefully review all terms and conditions before signing.<\/p><\/div><\/div>            <div class=\"single-article__conclusion\">\n                            <\/div>\n            <\/div>\n\n\n<h2 class=\"wp-block-heading\" id=\"Common_Uses_for_HELOCs\">Common Uses for HELOCs<\/h2>\n\n\n\n<p>HELOCs can be versatile financial tools. Here are some common uses:<\/p>\n\n\n\n<ul>\n<li>Home improvements and renovations<\/li>\n\n\n\n<li>Debt consolidation<\/li>\n\n\n\n<li>Education expenses<\/li>\n\n\n\n<li>Emergency fund or major purchases<\/li>\n\n\n\n<li>Business startup costs<\/li>\n<\/ul>\n\n\n<div class=\"fn_block block_fn_msg_box warning\"><div class=\"fn_block__icon\"><\/div><h3 id=\"Tip\">Tip:<\/h3><p>While HELOCs offer flexibility, it&#8217;s crucial to have a clear purpose and repayment plan before borrowing against your home&#8217;s equity.<\/p><\/div>\n\n\n<h2 class=\"wp-block-heading\" id=\"Frequently_Asked_Questions\">Frequently Asked Questions<\/h2>\n\n\n<div class=\"fn_block block_fn_faq_list\"><h3 id=\"HELOC_FAQs\">HELOC FAQs<\/h3><h4>What credit score do I need for a HELOC?<\/h4><div class=\"faq_inner\"><p>While requirements vary by lender, a score of 700 or higher will typically qualify you for the best rates. Some lenders may approve HELOCs for scores as low as 620, but with higher interest rates.<\/p><\/div><h4>Can I use a HELOC for anything?<\/h4><div class=\"faq_inner\"><p>Yes, you can use HELOC funds for any purpose. However, using the funds for home improvements may provide tax benefits. Always consult a tax advisor for specific advice.<\/p><\/div><h4>How much can I borrow with a HELOC?<\/h4><div class=\"faq_inner\"><p>Most lenders allow you to borrow up to 85% of your home&#8217;s value minus your outstanding mortgage balance. Your credit score and income will also factor into the approved amount.<\/p><\/div><h4>Are HELOC interest rates expected to decrease in 2024?<\/h4><div class=\"faq_inner\"><p>While it&#8217;s difficult to predict with certainty, some experts anticipate HELOC rates may decrease slightly by the end of 2024. However, rates remain subject to market conditions and Federal Reserve policies.<\/p><\/div><h4>How does a HELOC affect my credit score?<\/h4><div class=\"faq_inner\"><p>Opening a HELOC may cause a slight, temporary dip in your credit score due to the hard inquiry. However, responsible use and timely payments can positively impact your credit over time.<\/p><\/div><\/div>\n\n\n<p>Home Equity Lines of Credit can be powerful financial tools when used responsibly. They offer flexibility, potentially lower interest rates, and access to substantial funds based on your home&#8217;s equity. However, it&#8217;s crucial to understand the risks, shop around for the best rates, and have a clear repayment strategy.<\/p>\n\n\n\n<p>As you consider whether a HELOC is right for you in 2024, remember to assess your financial goals, compare offers from multiple lenders, and consult with financial advisors if needed. With careful planning and responsible borrowing, a HELOC can be an excellent way to leverage your home&#8217;s equity for your financial needs.<\/p>\n\n\n<div class=\"fn_block block_fn_button  buttons  is-flex is-flex-direction-column is-align-items-center\"><a href=\"#\" class=\"button  is-rounded is-primary is-large\" target=\"_blank\"  >Compare Top HELOC Lenders<\/a><\/div>","protected":false},"excerpt":{"rendered":"<p>It&#8217;s a lazy Sunday afternoon. You&#8217;re sipping coffee, scrolling through home renovation ideas on your phone. Suddenly, it hits you\u2026 <\/p>\n","protected":false},"author":37432,"featured_media":84457,"parent":184,"menu_order":0,"comment_status":"open","ping_status":"closed","template":"","meta":{"disable_branded_featured_image":false,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","ep_exclude_from_search":false},"categories":[1076],"tags":[],"_links":{"self":[{"href":"https:\/\/financer.com\/wp-json\/wp\/v2\/pages\/7120"}],"collection":[{"href":"https:\/\/financer.com\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/financer.com\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/financer.com\/wp-json\/wp\/v2\/users\/37432"}],"replies":[{"embeddable":true,"href":"https:\/\/financer.com\/wp-json\/wp\/v2\/comments?post=7120"}],"version-history":[{"count":51,"href":"https:\/\/financer.com\/wp-json\/wp\/v2\/pages\/7120\/revisions"}],"predecessor-version":[{"id":83578,"href":"https:\/\/financer.com\/wp-json\/wp\/v2\/pages\/7120\/revisions\/83578"}],"up":[{"embeddable":true,"href":"https:\/\/financer.com\/wp-json\/wp\/v2\/pages\/184"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/financer.com\/wp-json\/wp\/v2\/media\/84457"}],"wp:attachment":[{"href":"https:\/\/financer.com\/wp-json\/wp\/v2\/media?parent=7120"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/financer.com\/wp-json\/wp\/v2\/categories?post=7120"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/financer.com\/wp-json\/wp\/v2\/tags?post=7120"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}