There are some common misconceptions about Home Equity Loans, but they can actually be a good cost-effective borrowing option.
Dave Nellis, with America First Credit Union, explained that home equity is the difference between a home's current market value and the amount still owned on the mortgage.
It increases as homeowners pay down their mortgage and property values appreciate and decrease when values do.
Dave says, "The most common misconception is that a home equity loan eats up all the equity you have; this is not true. Most home equity loans are at 80 percent loan-to-value which leaves equity for members."
A Home Equity Line of Credit (HELOC) often offers lower interest rates than credit cards, making them a cost-effective borrowing option.
He says you can use them for everything from debt consolidations to a real estate down payment to remodeling funds.
You can also use a HELOC to cover tuition, housing and other educational costs - often at lower rates than private student loans.
America First Credit Union offers various home equity products, including HELOCs and renovation loans.
Dave says for a limited time, get a 4.49 percent introductory rate on a HELOC for six months! "This is the best deal in the industry," he says.
You can learn more at americafirst.com.
