When you purchase a home, you’re not just buying a place to live, you’re making one of the biggest investments of your lifetime. Your home’s value will typically grow as the years ago by. That’s good news for homeowners, because using your home’s equity may be a simple way to access the extra cash you may eventually need for large expenses, such as getting that new kitchen you’ve always wanted, remodeling your bathroom, adding vinyl siding, even tuition expenses, or taking the family on a dream vacation.
What is a HELOC?
Now you may be asking, “How can I tap into my home’s value to access the money I need?” A Home Equity Line of Credit, also known as a HELOC, may be the answer. Before we get into the details of a HELOC, let’s cover the basics.
Home equity is determined by taking your home’s appraised value and then subtracting your existing mortgage’s balance. Much like a credit card, a home equity line of credit is a form of revolving credit, but unlike credit cards, a HELOC uses your home as collateral. Also, a HELOC typically offers a much lower interest rate than a credit card.
When a lender approves your HELOC for a specific amount of credit, you can access that credit through a series of advances, which are made by writing checks . This gives you the flexibility to withdraw the money from your home equity line of credit when you need it. So, for example, you could borrow a sum of money for a purchase, pay that amount back with no penalty, and borrow from your HELOC again when the need arises.
Is a HELOC Right for You?
If you need money for large expenses, such as home renovations, the purchase of appliances, or maybe you want to consolidate debt, a home equity line of credit may be Just Right® for you! HELOCs have variable interest rates* that are tied to The Wall Street Journal prime rate.
Here’s what you need to know about a HELOC from BayCoast Bank:
- Typically, no closing costs
- No repayment penalty
- Interest-only payments during the draw period
- Primary and second homes only
- MA, RI, CT properties only
Do Renovations Add Value to Your Home?
In many cases, home renovations do add value to your home. There are several types of home renovations that can pay off in the long run, giving you a high return on your investment. Those may include upgrading garage doors, siding, kitchens, and decks. Always be sure to do your research before starting a big project to make sure it makes sense for your situation.
Take the Next Step!
At BayCoast Bank, we’re offering an introductory rate on our home equity line of credit of 8.25% APR for the first 24 months! **
Best of all, there are no application fees and generally no closing costs and you can borrow up to 80% of your property’s value.
We’re here to help!
Are you ready to apply for a HELOC? One of our experienced BayCoast Bank lending professionals is ready to guide you through the process. Visit one of our local BayCoast Bank branches today or call us at 888-806-2872. Or if you prefer, you can apply online.
*HELOCs have a rate floor and minimum Annual Percentage Rate (APR) of 5.00% and a maximum APR of 18.00% and are available for 1-4 family owner-occupied properties with a combined loan to value ratio of 80% or less. All loans are subject to credit approval and other restrictions may apply. Program guidelines may change without notice. NMLS # 403238. If the credit line or loan amount exceeds $250,000 or an online value is not available, a certified property appraisal (to be paid by the applicant) may be required. Hazard insurance is required, and flood insurance may be required. Ask us for current interest rate information.
**Introductory Annual Percentage Rate (APR) of 8.25% is fixed for the first 24 months (Prime +.25% thereafter) and available with automatic payment from a BayCoast Bank checking account. Variable APR is based on The Wall Street Journal Prime Rate (“Prime”) (8.25% APR as of 5/4/2023) plus a margin, and is subject to change. The rate floor and minimum APR is 5.00% and the maximum APR is 18.00%. 10-year draw period followed by a 10-year repayment period. For this example transaction, if $50,000 is advanced during the introductory rate period on a line of credit with an approved credit limit of $50,000 or more, $343.75 is the required monthly payment of the duration of the introductory rate period. Following the introductory rate period, monthly payments would be variable and based on the APR in effect at that time along with the outstanding principal balance. Offer available for 1-4 family owner-occupied properties with a combined loan to value ratio of 80% or less as determined by an online statistical appraisal acceptable to the Lender. Minimum loan amount is $5,000. If the loan amount exceeds $250,000 or an online value is not available, a certified property appraisal may be required. Hazard insurance is required, and flood insurance may be required. No annual fee. Offer subject to credit approval and other restrictions may apply. BayCoast Bank NMLS #403238.