A home equity line of credit, also known as a HELOC, can be a helpful way for homeowners who qualify to pay for home improvement projects, consolidate higher-interest debt, or fund other important financial needs.

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Many homeowners have found that now is a good time to take advantage of the equity in their home — especially if you’re planning home improvements that may increase your home’s value.

How does a HELOC work?

A HELOC differs from a home equity loan, which provides you with a lump sum all at once. Instead, a HELOC gives you a revolving line of credit that you can draw from as you need it, at any time throughout the borrowing period, typically 5 to 10 years. This makes it helpful for funding multiple home improvements or a variety of needs.

As you repay your outstanding balance, you can borrow against your limit again as needed, for a period of time as defined within the terms of your loan, usually 15 to 20 years.

Some advantages of a HELOC include:

  • Low rates compared to other types of loans.
  • The interest portion of your payments may be tax deductible*.
  • Use the funds for a variety of purposes.
  • Borrow what you need and access the remaining line of credit at your convenience.
  • Only pay interest on what you borrow for the borrowing period.
  • Flexible options for structuring your repayments over time.


How do you decide if a HELOC is right for you?

One factor that may make a HELOC right for you is if your home currently appraises significantly higher than the amount of principal that you owe on your mortgage. The recent increase in home values nationally has improved this equation for many homeowners.

With a HELOC you are borrowing against the equity in your home, which may be your most valuable asset. Using credit from a HELOC will reduce the portion of your home’s worth that you own free and clear, which means if you were to sell your home your proceeds would be reduced.

The value of your home as real estate changes over time, as does your overall financial picture. For these reasons, a HELOC or a home equity loan is a decision to consider carefully. It may be helpful to talk it over with your financial advisor.

Depending on your specific circumstances, now may be a great time to take advantage of one of these options.

Ready to learn more? We’re here to help!

Our friendly lenders are happy to talk through the options available and help you decide what’s right for you. Give us a call at (855) 662-5626, stop by your local branch, or schedule an appointment at appointments.arvest.com. You can also learn more at arvest.com/homeequity.



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*Arvest Bank does not offer tax advice – please consult a tax professional.