Home Equity Loans v HELOCs – What’s the Difference?

Spring is in the air – or at least it will be soon – which means it’s time to start thinking about home improvement projects. New siding and windows? Landscaping? Putting in a pool? Whatever you’re planning to do, Mid-Illini Credit Union is here to help! Follow our blog posts in March as we begin our next series: Home Equity Loans: A Wise Way to Finance or Double Jeopardy Disaster?

No matter what project you want to work on, you need a plan. So first, decide if it’s a do-it-yourself project or if you’re going to use a contractor. If it’s a DIY job, be realistic about your construction skill set. Just because that guy on TV can rebuild a fieldstone fireplace surround in 30 minutes doesn’t mean you can.

Either way, figure out how much it will cost to finance your project, then figure out if you have enough cash to pay for it out of pocket. If you’re going to borrow money to finance your project, consider the benefits of a Home Equity Loan or Home Equity Line of Credit (also known as a HELOC).

A Home Equity Loan (or second mortgage) is a finite sum of money which you borrow for a specific length of time and pay back in equal monthly installments. The equity in your home is the difference between what you still owe on the house and the current market value of your property.

A Home Equity Line of Credit (or HELOC, for short) is also a finite sum of money, but it’s set up as a line of credit, so you access the money as you need it and make payments only when you’ve drawn on the credit line that you’ve set up.

It’s quick and easy to get a Home Equity Loan or to set up a HELOC at Mid-Illini Credit Union. Rates are still low, we get an appraiser out to see you in record time, make a decision and set you up with your money quickly so you can get on with your projects.

After all, your home is one of the biggest investments you’ll ever make. Good maintenance, home improvements, and remodeling can increase your home’s value and may even reduce utility costs. Home enhancements are the number one use for Home Equity Loans.

Come back next time for the next post in our series: Home Equity Loans: A Wise Way to Finance or Double Jeopardy Disaster?

This article was posted in News.

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