A home equity line of credit allows you to borrow as much or as little from the equity of your home to finance any number of things in your life. And, if you don’t end up needing as much as you thought you did, no worries. With a HELOC, you only pay for what you spend.
Your financial situation is like your fingerprint – it’s unique to you. So, how do you know if a HELOC is right for you?
Here’s a checklist of questions to know if a HELOC would be a good financial choice:
- Look at your budget now. Compare it to what it would be once you receive the HELOC loan. Would you then have enough monthly cash flow to meet all your financial responsibilities and any other financial goals you are trying to reach?
- Have you brought down your credit card payments? How much?
- What is your current debt-to-income ratio? Can you handle additional debt?
- How much equity do you currently have in your home?
- Is this equity enough to cover the cost of the expenditures you need to make?
- Can you lower the amount you need immediately? If starting a business or renovating a home, can you delay projects or business expenditures until more cash is available?
These questions will help get you thinking about how a HELOC could fit into your life. After reviewing this list, meet with your trusted financial advisor to fully vet your answers to these questions. He or she will be able to guide you through the questions to paint a clear picture of which financial products would best serve your unique position.
Home equity lines of credit can be a great, low-interest way to your money when you need it. Check out a HELOC to see if it’s right for you.
This article is for educational purposes only. Tulsa FCU makes no representations as to the accuracy, completeness, or specific suitability of any information presented. Information provided should not be relied on or interpreted as legal, tax or financial advice. Nor does the information directly relate to our products and/or services terms and conditions.