For years, homeowners were afraid of tapping into their home equity—and rightfully so, considering the downward trend of home values in markets across the country.
But since prices began rising in late 2012, many homeowners have recovered significant chunks of equity and are now starting to feel more comfortable tapping into that, particularly to make renovations and repairs that may ultimately increase the value of their homes.
This combination of rising equity, tight inventory and historically low interest rates make home equity lines of credit (HELOCs) look pretty attractive, but homeowners looking to take advantage should make sure they understand the following information first:
- Does it have fixed interest rate or a variable interest rate and what is the rate?
- What is the limit?
- What are the terms of the draw period, when does it end and what are the terms thereafter? Particularly note how the monthly payment changes during and after this period.
- Is the interest tax-deductible?
- Savvy homeowners may want to check their credit beforehand at AnnualCreditReport.com to help determine what kind of terms they may get, and if there’s anything they can do improve their creditworthiness. Make sure your creditor walks you through the process so you completely understand the agreement.
Call me for recommendations of very reputable lenders who can help you get the most out of your property! I am your full service real estate agent and go-to girl for who-to-go-to!
Photo courtesy of Dillon Scheps
Photo courtesy of Dillon Scheps
