Put Your Home's Equity to Work
With each payment you make on your mortgage each month, you build up equity in your home. That equity is a tool that can be used to provide you with financial flexibility. A home equity loan or a home equity line of credit (HELOC) from UFirst Federal Credit Union allows you to put your home's built up equity to work for you. Contact the lenders at UFirst to get started.
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Home Equity Loan vs. HELOC - Which is right for you?
Home Equity Loan | HELOC | |
|---|---|---|
Interest Rate | Fixed interest rate | Variable interest rate |
Payment Structure | Fixed monthly payments | Variable monthly payments based on the amount borrowed |
Disbursement | Lump sum disbursement at the start | Revolving line of credit, borrow as needed up to the credit limit |
Term Length | Typically 5 to 20 years | Draw period (usually 5-10 years) followed by a repayment period (usually 10-20 years) |
Best For | Large, one-time expenses (e.g., home renovations, debt consolidation) | Ongoing expenses or projects where you need flexible access to funds over time |
Repayment | Begins immediately after loan disbursement | Interest-only payments during the draw period, followed by principal and interest payments during the repayment period |
Interest Deductibility | Interest may be tax-deductible if used for home improvements (consult a tax advisor) | Interest may be tax-deductible if used for home improvements (consult a tax advisor) |
Access to Funds | One-time access to the full loan amount | Access funds as needed, similar to a credit card |
Collateral | Home is used as collateral | Home is used as collateral |
How You Can Use Your Home Equity Loan
- Home Improvements: Fund renovations, repairs, or upgrades to increase the value and comfort of your home.
- Debt Consolidation: Pay off high-interest debts, such as credit cards or personal loans, to simplify payments and potentially lower interest rates.
- Education Expenses: Cover tuition, fees, and other educational costs for yourself or your family members.
- Emergency Expenses: Access funds for unexpected medical bills, car repairs, or other urgent financial needs.
- Investment Opportunities: Invest in stocks, real estate, or other ventures to potentially grow your wealth.
- Large Purchases: Finance major expenses like a new vehicle, boat, or other significant purchases.
- Vacation or Travel: Use the funds to pay for a dream vacation or extended travel plans.
- Starting a Business: Provide capital for a new business venture or to expand an existing one.
- Retirement Planning: Supplement your retirement income or fund retirement-related expenses.