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Utilizing a HELOC to Winterize Your Home

Winter may be the most magical time of the year, but the reality is that it comes with the type of extreme weather which can be hard on your home and your wallet.

Ensuring your heating system, insulation, roof and windows are ready for it may require projects that are over your budget. As a homeowner, you have loan options available, such as utilizing a home equity line of credit (HELOC) to winterize your home.

Creating a warm and cozy home environment for you and your loved ones is important and a HELOC can provide you with the winter-proofing funding needed without dipping into your savings or emergency funds. The use of home equity is on the rise. This blog provides you with details about HELOCs so you can make an informed decision about this popular funding option.

What is a HELOC?

A HELOC is a line of credit that borrows from your home’s existing equity. This type of secured loan lets you draw from your available HELOC balance and make monthly payments. HELOC lenders are usually credit unions and banks that will use your home as collateral for the loan.

The amount of your HELOC is determined by your home’s value. The higher the equity, the better your chance of getting a large line of credit, says HELOC rates are variable, meaning they will fluctuate depending on the interest rate market.

A HELOC typically has a 10-year draw period during which you can withdraw funds. After the 10-year draw period, you’ll have up to 20 years to repay the loan. The interest paid on HELOCs that are used for substantial home improvements may be tax deductible so consult your tax advisor for more information.

Who Offers HELOCs?

You can apply for a HELOC at a credit union, bank or other mortgage lender. You do not have to use the lender that holds your first mortgage, although doing so may be more convenient as they already have your financial information on file. The first step after applying will be to have your home appraised to determine its current value. Once that number is known, your lender will subtract the amount you still owe on your first mortgage to calculate your available equity.

Your lender will require a minimum percentage of equity in your home to approve the loan. Most lenders will require at least 20 percent of the available equity in your home. Other factors needed to ensure eligibility include having qualifying credit, a low debt-to-income ratio, a reliable payment history and an adequate income, according to

Uses for a HELOC?

When it comes to uses for a HELOC, the possibilities are endless. In the case of winter-proofing your home, major projects can include replacing your heating, ventilation and air conditioning (HVAC) system, a roof replacement, gutter maintenance, chimney cleaning, and insulation installation and/or replacement to keep your attic and pipes warm so they don’t freeze. Other uses include adding weather stripping to windows and doors, as well as updating your thermostat so your heating system runs efficiently.

Making HELOC Payments

One of the benefits of a HELOC is that it is a revolving line of credit, which makes it easy to borrow from and pay back as needed. Typically, once you borrow from your HELOC, you would be required to make interest-only minimum payments each month until the draw period ends. Any additional payments made with this apply to your principal balance.

Some lenders have options that let you pay both interest and principal in their monthly payments. The best rule of thumb is to consult with your financial institution and understand what features are offered with their HELOC before agreeing to it, cautions

How Travis Credit Union Can Help

Travis Credit Union offers both a HELOC and a home equity loan to help you with projects to winter-proof your home. For more information on how to use your home equity for home improvement projects, pay for college or a wedding, or for any other major expense, visit

If you’re not yet a homeowner, we can help you become one. We’ll work with you to find the right mortgage that fits your unique situation. Visit our Mortgage Hub to learn more.

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