What is Home Equity?
Do you need to remodel Kitchen and Bathroom in your Silicon Valley home? These kind of remodeling projects add a significant value to your home if they are done properly. According to National Association of Realtors research, kitchen and bathroom remodels add more than 30% to the value of a home.
One source of funds to use for such remodels is your Home Equity Line of Credit (HELOC). HELOCs are credit lines that banks and lenders offer to home owners based on the amount of equity on the home. Equity is defined by the balance of money above the amount of all the existing liens and mortgages that are secured by the property.
In the case of a HELOC, bank will issue you a checkbook that you can use to pay for your home improvements. The maximum amount of the HELOC is determined by your credit score, equity in your home, your home value and your debt-to-income ratio.
The advantage of using a HELOC vs a Home Equity loan is that you are only paying interest on the amount you borrow for your projects. So, HELOCs are ideal for quick flip projects where you are not going to hold on to the property for a long period of time to be subject to the interest on the full amount borrowed.
Contact Us if you need help funding your Home Improvement Projects.
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