This post is written and sponsored by U.S. Bank.
Seems you’ve got a bit of a dilemma on your hands. That big project you’ve had in your head for what feels like forever is now actually coming together on paper and just waiting to be started. You have the time to do it and – best of all? – you want to do it. There’s just one problem. You need funds, because without them, your dream project stays on hold.
But fear not! If you’re a homeowner, and have equity in your home, you may have some options. One possible funding opportunity could be a second mortgage through access to your home equity. You may be able to take out what’s called a home equity line of credit (HELOC), or a home equity installment loan.
Unfamiliar with the idea of using your home‘s equity as collateral on a loan? No problem. Before you go any further with your plans, check out the Achieve Your Goals site. It’s a new financial resource from U.S. Bank. It’s a great resource with a variety of articles on financial topics such as home equity.
While the end result – access to funds – is essentially the same through both a home equity credit line and installment loan, and they both use your home as collateral, they are structured differently. So you’ll want to see which of these makes the most sense for your unique circumstances.
On the other hand, a HELOC or Home Equity Loan may not be the right move for you if:
- You plan on moving soon. You’ll need to pay back the line or loan when you sell your home.
- You might not be able to afford monthly payments. Remember your home is used as collateral.
The HELOC
With a U.S. Bank home equity line of credit, you may be able to borrow funds (up to the limit on your line of credit) on an as-needed basis to finance what you want, when you want, without having to reapply. For example: buying a new vehicle, consolidating debt or a starting a home remodeling project. There’s no need to reapply as the need for funds arises (as long as you don’t exceed your amount of credit). Also, HELOC interest rates tend to be lower than credit cards or unsecured loans.
Home equity loans
A home equity loan is essentially an installment loan. You apply for a specific loan amount and make monthly payments to pay it off. A home equity loan can be a great way to consolidate debt or pay for a one-time expense like that big project that’s begging to be finished. A U.S. Bank home equity loan can be a great way to go: competitive rates, low monthly payments and the bonus of potential.
With U.S. Bank you have home equity options. This makes getting a loan or line an even better choice!
Tiffany Dover says
April 6, 2015 at 11:14 amThis is some great info!! Specially for an inexperienced buyer like myself! Thank you!
Claudia Davis says
April 7, 2015 at 9:20 pmThis is a good piece of information. I have a small kitchen and have always wanted to redo it because it really isnt working in terms of space and appliance placement. I do have equity in my home as I have owned it for 9 years but never thought about doing a HELOC. I really might consider this.
ellen beck says
April 7, 2015 at 10:08 pmI se US Bank nd llove them we will be looking onto a home equity loan soon.. Great info!
Robin (Masshole Mommy) says
April 8, 2015 at 9:49 amWe took out a home equity loan years ago to do some improvements to the house. It was totally worth it because now the value of the house is a lot more than what it was before we bought it.
Tammi @ My Organized Chaos says
April 8, 2015 at 1:07 pmIt’s great to have this option, I know many that do this so they can do home renos.
Laura (Lauras Little House Tips says
April 8, 2015 at 2:33 pmThese are really great tips. I recently paid cash for our new home and have already about 80,000 in equity. I like to know it is there if needed but will let it build up. I have a future to prepare for 🙂 Thank you for sharing.
Kelly Hutchinson says
April 8, 2015 at 4:51 pmWe do not own a home, but this is some great information to hang on to until we are able to get our own home.
Chelley @ AisForAdelaide says
April 8, 2015 at 5:35 pmWe used our equity to pay off medical bills! I’m glad we are out of them, but there is SO much debt that making home improvements seems like the biggest dream ever- although we have all new plumbing and electric and that’s the most important!
Aubrey says
April 9, 2015 at 1:20 amMy parents did that too. They used their equity to pay off all their debts and fix up the house. They got a better interest rate on their debt by doing that.
Shauna says
April 8, 2015 at 6:46 pmYou know, Hubby and I were just discussing something like this. We have so many things to do with the house, an equity loan might help. Thanks for the info.
Dee Mauser says
April 8, 2015 at 7:26 pmLittle things like painting, sprucing up the yard and other simple tasks does a great job in making your home more valuable. I would watch doing anything major because although your home may have better features than others in your area, it still doesn’t drive up the value much.
Myrah - Coupon Mamacita says
April 8, 2015 at 7:41 pmThis is such a great option to homeowners. It really comes out handy when in moments of need. We were able to do our new roof with an equity loan.
Liz Mays says
April 8, 2015 at 7:48 pmThis can definitely help out first timers! Having low monthly payments helps you afford furnishings and upkeep too.
kristin says
April 8, 2015 at 10:13 pmGreat info. I would have never known. Thank you sharing.
Dawn says
April 8, 2015 at 10:21 pmI didn’t know much about this at all! Thanks for providing so much useful information.
Jenny Temcio says
April 8, 2015 at 10:23 pmI have been wanting to remodel and redecorate for sometime. It’s nice to know that I have options to help me do so.
Sarah @ Must Have Mom says
April 8, 2015 at 10:46 pmThis is wonderful information! Thank you soo much for sharing.
Amy Desrosiers says
April 9, 2015 at 1:10 pmMy mom has relied on her home equity to refinance many times over the years. She is smart like that, and good with numbers.
Ann Bacciaglia says
April 9, 2015 at 6:51 pmThis is such great information. I am going to be redecorating a few of the rooms in our new house.
Our Family World says
April 10, 2015 at 7:42 amWe have been thinking about getting a home equity loan to do some repairs.
Julie Wood says
April 14, 2015 at 6:50 amGreat information on getting second mortgage, but I will pass on doing this because I want my house paid off! I do not want a big mortgage bill hanging over my head.