Your Naples Real Estate Expert
  • Home
  • Search Properties
  • Naples Information
  • For You

Six tips when considering a HELOC for Home Renovations - Naples Real Estate

10/15/2019

0 Comments

 
Six tips when considering a HELOC
Home Equity Line of Credit (HELOC) can be a great way to make cash available using the equity you have built up on your home. This can be used for anything from college tuition to home renovations. This article shares six quick tips on how to shop for and manage a HELOC.
Shop around. 
Comparison shop to get the best rate.
 Often, people go with the same lender that has their home mortgage, but this isn't necessary. Make sure you get a sampling of enough lenders and do an apples to apples comparison to consider interest rates and lending fees.

Ask about the margin. 
As noted in the first one, it is important to make sure you are comparing apples to apples when determining which lender to go with. If you're offered a rate that's lower than the competition, it's may just be an introductory rate, so ask about the lender's margin. For example, if the introductory rate is 3.5 percent and your lender's margin is 2 percent, your final interest rate will be 5.5 percent.


Consider a conversion clause. 
Some HELOCs allow you to convert a variable interest rate to a fixed rate, usually during the draw period (5-10 years). Inquire about these as options that allow you to enjoy the low rate from a variable interest rate but ultimately secure more predicability in the rate over time.


Watch out for balloon payments. 
Balloon payments mean that you must pay the balance in full when the draw period is up. Do not choose this option unless you have the financial means to handle it. Proceed with caution if you are "expecting" to have the financial means down the road as circumstances can change but your loan commitment doesn't.


Create a family plan. Decide what the money will be used for and who will handle the funds. Keep in mind, you can lose your home if the HELOC is not handled properly. Create a payback plan. Come up with a reasonable plan for how the loan will be paid back.
0 Comments

Your comment will be posted after it is approved.


Leave a Reply.

    NAPLES REAL ESTATE BLOG

    Picture

    Blog CATEGORIES

    All
    Home Improvement
    Naples Happenings
    Naples Information
    Real Estate News
    Tips For Buyers
    Tips For Sellers

    Access Renee Hahn Facebook Posts

    This section will not be visible in live published website. Below are your current settings:


    Current Number Of Columns are = 2

    Expand Posts Area =

    Gap/Space Between Posts = 7px

    Blog Post Style = card

    Use of custom card colors instead of default colors = 1

    Blog Post Card Background Color = current color

    Blog Post Card Shadow Color = current color

    Blog Post Card Border Color = current color

    Publish the website and visit your blog page to see the results

    RSS Feed

CONTACT US
ACCESS MY ACCOUNT
HOME VALUATION

Renee Hahn Logo

Chairman's Platinum & Elite Club
​Top 2% in closed sales volume 
out of 7813 real estate professionals 
​at Naples Area Board of Realtors

239.287.2576
Renee Hahn, William Raveis Luxury Brand
Picture
©2023 All Rights Reserved
​The source of this real property information is the copyrighted and proprietary database compilation of the © 2023 M.L.S. of Naples, Inc. and © 2023 Renee Hahn, Realtor, William Raveis Real Estate. Accuracy of this information is not warranted or guaranteed. Information should be independently verified if any person intends to engage in a transaction in reliance upon it.
​​Privacy Policy
Our Web site Accessibility: We are committed to providing an accessible web site. If you have difficulty accessing content, have difficulty viewing a file on the web site, or notice any accessibility problems, please contact us to specify the nature of the accessibility issue and any assistive technology you use. We will strive to provide the content you need in the format you require.
  • Home
  • Search Properties
  • Naples Information
  • For You