HOME EQUITY LINE OF CREDIT (HELOC)

A Home Equity Line of Credit (HELOC) is a type of revolving credit that allows homeowners to borrow funds using their home's equity as collateral. Equity is the difference between the current market value of the home and the remaining balance on the mortgage. HELOCs provide homeowners with a flexible source of financing that can be used for various purposes, such as home improvements, education expenses, debt consolidation, medical bills, or other financial needs.

Unlike a traditional loan, where you receive a lump sum upfront and make fixed payments over time, a HELOC works more like a credit card. Once approved, you're given a credit limit based on a percentage of your home's equity. You can then draw funds from the HELOC as needed, up to the established limit, using checks, a credit card, or electronic transfers. As you repay the borrowed amount, the credit becomes available for future use, similar to how a credit card balance decreases as you make payments.

Advantages of HELOCs

A Home Equity Line of Credit (HELOC) provides homeowners with a range of valuable advantages, making it a versatile and sought-after financial option. The foremost advantage lies in its flexible access to funds. Unlike traditional loans, a HELOC grants you the freedom to withdraw funds as needed, allowing you to effectively manage unforeseen expenses or seize investment opportunities with ease.

A key feature of a HELOC is the variable withdrawal capability. This distinct characteristic enables you to withdraw funds incrementally, up to the credit limit established by the lender. As you only accrue interest on the withdrawn amount, you can potentially save on costs compared to traditional loans, where interest accumulates on the entire sum. Moreover, HELOCs commonly offer lower interest rates than credit cards and personal loans, contributing to their cost-effective nature.

Another noteworthy benefit is the potential tax deductibility of HELOC interest payments. Depending on your specific circumstances, the interest you pay on a HELOC might be tax-deductible, providing a potential reduction in your overall tax liability. This makes HELOCs particularly appealing for those seeking both financial flexibility and potential tax advantages.

Join Alcoa Community FCU For Your HELOC

Alcoa Community Federal Credit Union’s Home Equity Line of Credit offers advantages that most other financial institutions can’t match. We allow you to borrow a higher percentage of your home’s value, plus our HELOC has a fixed interest rate. With regular Home Equity loans, you pay interest on the full amount of the loan until it’s paid off. With HELOCs, you only pay interest on the amount you withdraw, and your interest may even be tax deductible. Consult your tax advisor. Our HELOC is available whenever you need it. Unlike a conventional home equity loan, there is no need to apply, wait for approval and pay processing fees each time a need arises. With a HELOC you only withdraw the amount you need when you need it.

Use your Home Equity Line of Credit for:

  • Home Renovation & Repair

  • Medical Expenses

  • Vehicle Repairs

  • College Tuition & Fee’s

  • Unexpected Expenses & So Much More!

For more information on our Home Equity Line of Credit Product, give us a call at 501.315.5626.