Home Equity Loans Making a Comeback

Home improvement season is here, and many people are taking advantage of a tried and true way to get more financial flexibility and to turn current homes into dream homes.

Home equity lines of credit are making a comeback as home owners tap into the rising value of their homes for the purpose of making much needed, or always-wanted improvements.

Whether remodeling their kitchen or making an addition on their house, Community Financial members are actively utilizing loans these days according to Call Center Branch Manager, Jean Coulter.

“Lots of people are getting loans for home improvements, and additions are popular, especially in the Plymouth area,” she said. “I had one member who did an addition, he was actually copying the neighbors, somebody across the street.”

Many people are tapping into home equity loans in order to upgrade their homes.

                                       

Community Financial offers two types of home equity loans: a line of credit loan and a fixed-term loan. The line of credit loan is signed for a 10-year-period during which the home owner borrows against it and makes interest-only payments each month.  At the end of that period, the owner has a 20-year payback period. These loans are currently the most popular, especially with Community Financial’s current loan rates, which are as low as 2.50% APR.

The fixed-term loan allows borrowers to pay the loan back within 20 years in set payments.

Coulter noted that people are using the loans for other expenses as well. Some people are using them for landscaping projects and pools, while others have an eye on their children’s futures.

“A lot of people are using them for college expenses for their kids, they’ll open them up and then use them to pay for that,” Coulter said.

Home equity loans can also be useful for paying outstanding credit card balances and consolidating debt, she noted, because of the current low interest rates.

While a home equity loan affords homeowners the opportunity and flexibility to make important upgrades and meet other needs, Coulter stressed that it’s important for people to realize that they won’t necessarily get equal value back when it’s time to sell, so invest wisely.

For more information on home equity lines of credit from Community Financial, including a rate disclosure, visit this link.