Why are HELOCs a Good Idea this Summer?

A father and daughter grill hamburgers on a patio paid for with a HELOC.

Summer is officially here, bringing in the sunny days, neighborhood block parties, and, of course, the unavoidable increase in spending. For military families preparing for renovations, vacations, and other seasonal expenses, there's a strategic ally: the Home Equity Line of Credit (HELOC) from Armed Forces Bank. Here are several reasons why a HELOC can be a smart choice for summer expenses.

What is Home Equity Line of Credit (HELOC)?

Before jumping in, let’s quickly revisit the basics. A Home Equity Line of Credit (HELOC) is a loan where you can borrow money using your home as collateral. It's similar to a credit card, with a limit you can borrow up to. However, HELOCs usually have lower interest rates because they are backed by your home.

You can borrow what you need during a flexible period, usually 5-10 years, making interest-only payments. Later, you start repaying both the money you borrowed and the interest. HELOCs are handy for paying for big expenses, managing debt, or dealing with unexpected costs. Plus, using them for home improvements might offer tax benefits. (To learn more about HELOCs and how they work, check out our previous article).

Reasons to Use a HELOC this Summer:

A HELOC gives you flexibility in managing your summer expenses. Here's why you should consider adding it to your financial mix this season:

1. Flexible Funding for Home Upgrades

Summer is an ideal time for home improvement projects. Whether you're looking to build a new deck, upgrade your landscaping, or renovate your kitchen, a HELOC offers a flexible source of funding. Unlike a home equity loan which provides a lump sum, a HELOC lets you to borrow as much or as little as you need (up to your credit limit) and only pay interest on the amount you use. This flexibility can be useful for projects that might have varying costs or unexpected expenses.

2. Tax Benefits

In some cases, the interest paid on a HELOC is tax-deductible, especially if the funds are used for home improvements. While tax laws can be hard to understand and change frequently, this potential benefit can add to the overall cost savings of using a HELOC. Be sure to meet with a tax advisor to understand how the current laws apply to your situation.

3. Financial Safety Net for Unexpected Expenses

Summer often presents unexpected expenses, ranging from home repairs to medical emergencies. By having a HELOC, you can feel rest assured knowing that you have immediate access to funds if needed. This is particularly helpful during stormy seasons when repairs may be needed to address damage caused by severe weather.

4. Boost Your Home's Value

Home improvements funded by a HELOC can increase the value of your home. Installing new windows, finishing your basement, or improving your outdoor space can provide immediate enjoyment and increase your home's market value. This means that you're not only spending money but also possibly boosting your home's equity and future resale value.

5.Lower Interest Rates Than Credit Cards

While summer activities and travel can quickly add up, and it's tempting to rely on credit cards. However, credit cards often come with high-interest rates. A HELOC, meanwhile, typically offers lower interest rates because it is secured by your home. This can make it a more cost-effective way to finance summer vacations, whether you are planning a family trip or a weekend getaway.

6. Easy Access to Funds

Once you have a HELOC set up, accessing the funds is usually quick and straightforward. This can be particularly useful in summer when opportunities and needs can arise unexpectedly. Whether it's grabbing a last-minute vacation deal or repairing an air conditioning system, having quick access to money can make a big difference.

Where can I get a HELOC near me?

With summer now in full swing and financial obligations piling up, it's time to explore the advantages of a HELOC as your trusty sidekick. Armed Forces Bank's HELOC provides flexibility to meet different needs and also offers:

  • A special fixed introductory rate for 6 months
  • Option to borrow up to 85% of your home’s value (conditions and geographic restrictions apply)
  • Low minimum monthly payments
  • Waived annual fee with auto-draft payments
  • Minimal or no closing costs
  • Lower interest rates compared to most credit cards

Say farewell to your financial worries and instead welcome the joys of summer with Armed Forces Bank's HELOC options. Start your journey toward financial freedom today!

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Subject to credit approval. Subject to collateral approval. Fees apply. Geographic restrictions apply. Documentation requirements may apply. Consult a tax advisor about tax deductibility.