Home Equity Line of Credit

The equity you've built can help you make improvements, add new space, or even pay for new adventures.

Family sitting on steps. HELOC 6.00% APR 6-Month Intro Rate. 8.25% APY Adjusts to Qualified Rate.

What is a Home Equity Line of Credit?

A Home Equity Line of Credit is a form of revolving credit that allows you to take advantage of the equity you've built up in your home. When you use your home's equity, you're borrowing funds directly from your own equity, then repaying it — usually at a relatively low-interest rate.

Because it acts as a line of credit rather than as a standard loan, you'll have access to funding in any amount (up to the total amount of equity you have) whenever you need it. And you only pay interest on the portion of the home equity line of credit you use.

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How does a home equity line of credit work?

With a HELOC, you can access a certain amount of money, up to a predetermined credit limit, over a set period of time, usually 10 years. You can use this money for anything you want, such as home renovations, debt consolidation, or other major expenses.  HELOCs can potentially lower your monthly bills and boost your credit score by paying off high-interest credit cards, medical bills, and other debt. 

Unlike a traditional loan, you don't receive the entire amount upfront. Instead, you can borrow and repay money as needed within the set time frame. You only pay interest on the amount you borrow, not the entire credit limit.

HELOCs typically have variable interest rates, which means that the interest rate can fluctuate over time based on market conditions. The interest rate on a HELOC is usually lower than other types of loans, such as credit cards or personal loans, but it can still be higher than your mortgage interest rate.

 

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What are the benefits of a home equity line of credit?

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Flexibility

With HELOCs you can draw on the line of credit at any time during the draw period, and you only pay interest on the amount you borrow.  This means that you can use the funds for a variety of purposes. 
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Lower rates

HELOCs typically have lower rates than other types of loans because the loan is secured by your home's equity making it a cost-effective way to borrow and pay off other high-interest debt. 

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Ease of application

The application process is simple and straightforward.  Before you begin your application, it may be helpful to take a minute and review our home equity document checklist.

 

 

How long does it take to get a home equity line of credit?

Step 1. Complete a basic application.

Apply online in minutes, call 888-873-2640, or visit a Horizon Bank branch.

Step 2. Work with an Advisor.

An experienced Horizon Loan Advisor is here to guide you through the process. 

Step 3. Close on your HELOC.

Once your loan is approved your Loan Advisor will schedule your closing.

 

 

Ready to apply for a home equity line of credit?

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APR Disclosure

*Introductory APR (Annual Percentage Rate) will be fixed at 6.00% APR for the first 6 months for those lines with up to 89.9% loan to value (LTV). Thereafter, the rate may vary. The rate is based on credit score, LTV and Prime Rate + 0.25%. The Prime Rate equals the highest Wall Street Journal (WSJ) prime rate as published in the WSJ effective the date the 6-month introductory period expires. WSJ prime rate effective 11/8/2024 is 7.75% APR. Example: credit score of 730+ and LTV of 70% or less will have a rate of 8.00% as of date of publication following the introductory period. Maximum rate is 25%. APR will not fall below a floor of 3.25%. Annual fee is $50, waived for first year. Reimbursement fee up to $399 applies if line is closed within the first 36 months. Subject to credit approval. Other terms and conditions may apply and are subject to change without notice. Introductory rate not available on home equity lines of credit opened within the last 12 months unless line amount is increased and a 25% advance is taken at funding. The 25% advance does not include the payoff disbursement. Offer expires December 31, 2024.

Get answers to your frequently asked questions about home equity lines of credit (HELOC).

Cash out Refinance vs. Home Equity Line of Credit

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If you’re interested in borrowing against your home’s available equity, you have choices. One option is to take out a home equity line of credit (HELOC). Another option is to refinance your mortgage loan and get cash out. Determining whether a HELOC or cash-out mortgage refinance is right for you is different for every individual, so it’s smart to compare your options to determine the right choice for you.

Here are some of the key differences between a cash-out refinance and a home equity line of credit:

Cash-out mortgage refinance

  • A cash-out refinance  replaces your existing mortgage with a new home loan. Depending on the existing terms on your mortgage and the additional cash you take out, you could end up with larger monthly payments and will possibly extend the timeframe for paying off your mortgage.
  • You may incur closing costs associated with refinancing, which generally range from 3% to 6% of the total refinanced amount.
  • Interest rates tend to be lower than other options like HELOCs and home-equity loans.

Home Equity Line of Credit (HELOC)

  • If you currently have a good interest rate on your mortgage, obtaining a HELOC will allow you to maintain that rate while still obtaining cash to use however you see fit.
  • Usually, you can borrow up to 89.9% of the value of your home, versus 80% with a cash-out refinance, and closing costs are lower with a HELOC.
  • Know that you will be making two payments on your house versus one – your existing mortgage and your payment on the HELOC.

    Before deciding whether to apply for a HELOC or a cash-out mortgage refinance, consider how much money you really need and how you plan to use it. Factor in interest rates, fees, monthly payments, and tax advantages as you weigh your options.

When you are ready to apply, Horizon is here to help. Learn more here, apply online or talk to your local advisor at 888-873-2640.

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