The temps are on the rise and you are thinking about your summer plans. Are you hoping to take a much-needed vacation with the family, bask in the sun while floating in your gorgeous pool, or even catch up on your summer reading in your new sunroom?

Planning the summer of your dreams is easy. But funding the summer of your dreams may be a bit more of a challenge. However, your home could be the key to making your dreams a reality! 

Let Your Home Do the Work

Is your home worth more than you paid for it? The difference between what it’s worth and what you paid or currently owe is known as equity. And, you can borrow against this equity with a Home Equity Loan or Line of Credit (HELOC).

Let’s say, you owe $180,000 on your home, but it appraises at $250,000. This means your equity amount is $70,000. Lenders are typically approving Home Equity and HELOCs up to an 80% combined loan-to-value of your home, so 80% of a $250,000 home would be $200,000 and subtracting your $180,000 first mortgage leaves you with $20,000 to borrow. Genisys Credit Union will lend up to 90% of your combined loan to value. Meaning that of your $70,000 in equity, you could borrow up to $45,000.

You’ll be able to use these funds to pay for some of those summer plans or projects you’ve got on your list. Plus, if you use the equity to make improvements to your home, you could increase the value of your home even more.

Home Equity Loan vs. HELOC

A Home Equity Loan is a loan where you get a specific loan amount, at a fixed-rate, for a set term, with the same payment every month until it is paid in full. If you have a predetermined amount that you want to borrow for a project and nothing else in the future, you may opt for a home equity loan. 

A HELOC or home equity line of credit is exactly that, a line of credit, meaning you will have access to draw your funds as you need them, pay it back, and then have access to the funds to borrow again. With a HELOC, you only pay back what you use (draw) of your line of credit. Think of it as a credit card. If your approved credit card limit is $10,000, but you only spend $1,000 – you only have to pay back the $1,000 (the other $9,000 is still available to use if and when you need it). HELOC payments are interest only, which allows you to pay as much or as little as you need. HELOCs are generally a variable-rate loan that adjusts with the prime rate, set by the Federal Reserve.

HELOCs are a great option because even after your projects are complete you have a nice safety net to draw on when you need it. Here at Genisys, we have a really nice ‘lock’ benefit available with our Flex HELOC. It allows you to convert a portion of the outstanding balance to a fixed rate home equity loan in increments of $5,000. You keep the remaining portion of your line of credit open for draws and payments as needed and the remaining balance stays at the Line of Credit rate.

Both Home Equity Loans and HELOCs can be used for a variety of purposes.

• Home Improvements / Remodels

• Paying for a Well-Deserved Vacation

• Consolidating Debt

• Financing Your Child’s College Expenses

• Medical Expenses 

Getting Started

We have many home loan options available to help you meet your needs. If you’d like to learn more about Home Equity Loans, Home Equity Lines of Credit, or would like to apply for one, visit any branch or give us a call at 248-322-9800 ext 5. Our Home Equity Team is ready to help! 

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