If you own a home, you probably have a surprising amount of equity. Home prices have been hitting record highs which means you likely have a large amount of cash sitting in your home.
If you have debt (credit card, student loan, etc…) or want to do renovations that could add to the value of your house (updated kitchen or bathroom, new roof, windows, etc…) then now could be the perfect time to pursue a home equity line of credit (HELOC).
Here’s How It Works:
At the highest level, a HELOC gives you a line of credit that you can access at a super attractive rate. For example, Figure offers rates as low as 3.00% APR.
To provide a more concrete example, let’s say you have $10,000 in credit card debt. You’re probably paying 15-20% on that.
Let’s also say your home has gone up in value (a pretty safe assumption). That means you could take out a line of credit for say $25k-$50k. You could use $10,000 of that to pay off your credit card debt and save a huge amount because you’d be trading your 15-20% credit card interest rate for a 3% rate. You’d also still have money left over that you could access later to remodel your bathroom, pay student loans down, etc…
Why Don’t All Homeowners Do This?
Two main reasons. 1) Many homeowners don’t know about HELOC’s and/or don’t have a need for cash. 2) Some larger banks stopped offering them because it can be risky to the bank.
Fortunately, lenders like Figure are still offering HELOC’s. Even better they’ve made it so the entire process takes place online. You can see how much you’re approved for in about 5 minutes and you can get your funding in as little as 5 days.
If you’re a homeowner with some needs for cash, it’s worth checking how much you can get from Figure. (important note, checking doesn’t impact your credit score)
