What You Need to Know About Home Equity and Its Benefits

Considering the current economic environment and the fact that home values are at near record highs, there’s never been a better time to explore your options when it comes to home equity and how it could help you financially. Utilizing your home's equity is a great way to make sure you have the funds available to pursue other life endeavors that are a part of your financial future. Let’s take a look at just exactly what equity is and how you can “build it.”

Equity is the difference between the appraised value of your home and what you still owe on your mortgage. For example, if you have a home valued at $250,000, and you only owe $200,000, then you would have around $50,000 of equity in your home.

How you build it is simple! If you’ve consistently paid your mortgage and the value of your home hasn’t decreased, then you’re already building equity! Making significant improvements to your home, such as adding an additional bathroom or other room that would add greatly to the resale value, will help home equity accumulate faster as well.

How can home equity benefit you?

With the costs of living increasing as a result of today’s economic challenges, at times, you might find yourself needing to reassess your current finances. This is where home equity can benefit you as a homeowner if your home is valued higher than your initial purchase price. At Town and Country Bank and Peoples Prosperity Bank, we have options to suit your needs.

Home Equity Loan

A home equity loan is an excellent option for people who have built equity in their home and want to access their funds to use at their discretion. A home equity loan is a traditional installment loan with fixed principal and interest payments to be paid back monthly.

Some features of a home equity loan include the following:

• Ability to access your funds in one lump sum.
  • This is particularly advantageous for people wanting to make a substantial purchase or payment quickly.
• You can utilize the funds as you see fit! This flexibility allows you to use the equity you’ve built as a potential safety net, should you need it.
• You can take advantage of the low-interest rates to make your payment affordable and manageable.

Home Equity Line of Credit (HELOC)

A HELOC is another great option for our customers who may want to utilize their equity for a range of needs that may arise! This option is offered at a variable rate with interest only payments.

Some features of a HELOC include the following:

• Unlike home equity loans, a HELOC is a revolving line of credit.
  • This means that as your principal balance is paid, more funds are then available.
• Your funds are available anytime without reapplying.
  • Simply apply once and use them repeatedly as needed!
• Money from your HELOC can be used to cover a wide range of seasonal and other needs, such as education, or major home renovations or repairs.

Let us serve you.

Still have questions about how our home equity financing can benefit you? Contact us today or stop by one of our 12 branches to talk with our experienced bankers about how your home equity can pay off for you. We’re always looking for ways to make sure that you get the most out of your banking experience with us. Come in and explore your options today!