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 12/19/2024 is 7.50% APR. Example: credit score of 730+ and LTV of 70% or less will have a rate of 7.75% 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 March 31, 2025.

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

Is Refinancing or a Home Equity Line of Credit Better?

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If you’ve paid off a good amount of your mortgage, you likely have home equity. Home equity is the difference between your home’s value and what you owe. This equity can be used as collateral to secure funds for home improvement projects and living expenses. But with so many options, which is right for you?

HELOC or Refinance Cash-Out?

A home equity line of credit (HELOC) is a second mortgage secured with your home equity. Refinancing, on the other hand, is a new loan entirely. Each has its benefits and drawbacks, explored below.

HELOC advantages

HELOCs are revolving credit lines that work like credit cards. Your credit limit is determined by how much equity your home has. Unlike credit cards, HELOCs have an initial draw period during which you only pay for what you use. This interest-free period can last for up to ten years before your repayment period begins.

HELOC considerations

With HELOCs, it’s important to consider if variable payments are doable for you. Because you can use different monthly amounts, it can be challenging to track what you owe.

Refinance advantages

To refinance your home, you take out a higher loan to replace your previous mortgage and receive a lump sum payment of the difference between the two. Refinancing provides a lot of money at once but also leads to longer terms of paying interest. 

Refinance considerations

Before refinancing your home, there are many items to consider, including how long you plan to stay there and how much you still owe. A HELOC is a better option if you don’t plan to stay in your home for long.

If you’re considering a refinance cash out or HELOC, Horizon Bank loan advisors are here to help. Call 888-873-2640. 

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