Tony and Lisa, SF Natives.
Putting them first since 1991.

BUYING A HOME

5 reasons to use a HELOC

So you've opened a Home Equity Line of Credit, what can you do with it? Here are 5 ways to use your HELOC.

5 Reasons to Use a HELOC

 

So you’ve taken out a Home Equity Line of Credit. It’s a great way to take advantage of the equity you’ve established in your home to improve your financial well-being. First, ask yourself if advancing funds from your line of credit is the right option for you.

 

What is a HELOC?

A home equity line of credit (HELOC) is an affordable means of accessing the equity in your home to get cash needed for a variety of topics.

An SF Fire Credit Union HELOC features:

  • The flexibility of using funds for any purpose you need
  • A 10-year ‘draw’ period in which to access your funds
  • Interest-only minimum payments due during the draw period
  • A 15-year repayment period to repay your balance at an affordable rate

However, it’s important to have a solid budget in place.  Your HELOC is tied to your home, so you might run into trouble if you borrow more than you can afford to repay.

 

How to Use Home Equity

If you’re ready to use your available credit, here are some of the best ways to use the funds to improve your financial picture.

 

1. Debt Consolidation

High interest loans such as credit cards can cost the average American family thousands of dollars each year. With interest rates reaching 20% or higher, you might pay a lot for the privilege of borrowing.

With a Home Equity Line of Credit from SF Fire Credit Union holding an interest rate as low as 3.25%, it’s an affordable way to pay off your debt quickly while paying less in interest, saving you money in the long-term, and letting you put more aside for savings.

Is debt consolidation right for you? Use our helpful calculator to find out. 

 

2. Home Remodeling

When you own a home, you probably spend a lot of time thinking about home improvements, whether to build equity or just to make it more comfortable. Using your Home Equity Line of Credit is an affordable way of financing major projects that will increase your home’s value.

And since it’s a line of credit instead of a fixed loan, you’ll only need to borrow funds when payments are actually due. This means you’ll pay less in interest, especially if the project will be completed in stages. 

 

3. Paying for College

If you or your children are heading to college, you’ll have lots of costs to consider, such as tuition and living expenses.

Depending on your options for student loans, the interest rate you pay might well be higher than that for your Home Equity Line of Credit. 

 

4. Paying for a Wedding

A wedding can be a once-in-a-lifetime event … but it can also come with once-in-a-lifetime expenses.

As with home improvement projects, tapping into your HELOC can be a good way to pay for a dream wedding at an affordable rate. As with a home remodel, you only start paying interest once you actually need to disburse the funds.

 

5. Investing in a Business

Starting a business or looking to expand? Using your Home Equity Line of Credit funds to invest might be a lower-interest-rate alternative to taking out a business loan, with a lot of flexibility.

However, be sure to consider your business outlook. Is it likely to repay your investment enough to cover the costs of borrowing against your home?

 

We're here to help

After considering these points, you may still have questions about your particular situation. Our Real Estate Loan Officers are here to help you answer questions about whether using your HELOC is a good option for you.

 

Related Content

Buying a Home

10 Tips for a First Time Home Buyer in the Bay Area

When it comes to financ­ing a home for the first time, you might have a lot of ques­tions. Here are some things to con­sid­er as you go shop­ping for your new home.

Learn More

Buying a Home

7 First Time Home Buyer Mistakes

A lot of first-time home buy­ers make the same mis­takes. So, before you buy that wel­come mat, here are 7 things to avoid when buy­ing your first home. 

Learn More

Buying a Home

11 Things to do Before Buying a House

Buy­ing a home is an excit­ing time and a huge achieve­ment. Before you buy that wel­come mat, here are 11 things you should know and do. 

Learn More

Discover More

Tony and Lisa, SF Natives.
Putting their family first since 1991.
BUY OR REFINANCE A HOME

Get the mortgage you deserve

Our great rates, local expertise, and member-first service make us the best choice for your mortgage.

Learn More
Tony and Lisa, SF Natives.
Putting their family first since 1991.
Kundan, Bay Area artist.
Putting her first since 2016.
CREDIT CARDS

Get the card that works for you

Our fee-friendly Platinum Visa Credit Card comes with rewards, travel benefits, and a low APR.

Learn More
Kundan, Bay Area artist.
Putting her first since 2016.

Let's Talk

As a local credit union, we want to get to know you and help you achieve your goals. Come into a branch or call us today. Our people are happy to serve you.

Call or Chat

(415) 674-4800
(888) 499-FIRE (3473)
Mon – Sat 7:00 AM – 8:00 PM*

*Please note that 'After Hours Phone Support' is available outside of regular Contact Center Hours.

Chat Now

Stop by a branch

Branch hours
Mon – Fri 8:30 AM – 6:00 PM
Saturday 8:30 AM – 3:00 PM

Find a Branch or ATM