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As the weather is getting warmer, you might be thinking of the projects you want to get done to make the most of the summer. You might be realizing that your kitchen could use some updating, or that there was some wear and tear that occurred over the winter months that could use some fixing.
It’s no secret that things like home repair or renovations can get expensive, but you do have options to take advantage of to help you out and relieve some of that financial strain, including a home equity line of credit (HELOCs). Your home is one of, if not, the biggest assets someone can have, and HELOCs are a line of credit that can provide you with access to money to help you out with larger expenses, like home renovations, by using your home as collateral.
Typically, HELOCs will have a variable interest rate (though some providers might offer fixed), and you usually won’t be able to borrow more than 80% of your home’s value. However, to really calculate how much you’d be able to borrow, you should always subtract how much you still owe on your mortgage payments (if any) from that 80%. For example, if your home is worth $100,000 and you still owe $40,000, you would subtract that $40,000 from $80,000 (80% of your home’s value), meaning you can borrow up to $40,000 for whatever home project you have in mind.
Keep in mind that just because you can borrow that $40,000, it doesn’t necessarily mean that you should. If your project is smaller, say, around $10,000, you should only borrow that amount that covers what you need to pay. You can always borrow more later on for other projects, like additional home renovations, consolidating debt, college tuition costs, and much more.
HELOCs can get confusing, but once you learn how they work and how to calculate what you’re able to borrow, they can be a huge help when it comes to big projects like redoing your kitchen or adding an extension onto your home. However, a HELOC might not always be the best fit, depending on what you need it for. It’s always a good idea that you speak with a professional, like one of NuMark’s experts, to walk you through the process so you have a better understanding and can make the best decision for your project, and your financial future.
To learn about NuMark’s HELOC offers, check out our page here, or call 815-729-3211 to speak with an expert!
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