Find Flexibility and Convenience with Home Equity Lines of Credit

Home equity lines of credit are one of the most convenient and sensible financing solutions available to homeowners when it comes to funding home improvement projects. A home equity line of credit (HELOC) is a line of credit granted to you by a lending institution in which the collateral is the equity you've built up in your home. Once your credit limit has been determined, you can draw from your HELOC at your discretion to pay for whatever project you've got in mind.

How Do I Obtain a HELOC?
The only thing you need to obtain HELOC is home equity. When you apply for your home equity line of credit your lender will take a percentage of your home's worth (say 80%) and subtract from that figure what you still owe on your mortgage, arriving at the credit limit you qualify for. If you've got a $200,000 home that you still owe $100,000 on, then by the above calculations you'd be approved for a HELOC with a credit limit of $60,000. Once your HELOC has been established, all you need to do to acquire funds is transfer the desired amount into your bank account and write the check. Voila! Your new home improvement is paid for!

What Makes a HELOC So Special?
HELOC's are one of the best home improvement financing options for many reasons. For one, there's no worrying about whether you'll be approved or not, or how much credit you'll be granted. These lines of credit are based on the equity you've built up in your home, taking away the uncertainty and guesswork that comes hand-in-hand with applying for other types of financing. Even more attractive, however, is the fact that since it's a line of credit as opposed to a loan, you'll only owe on what you borrow. If you're approved for a $60,000 line of credit and decide on a $5,000 bathroom remodel, that $5,000 is all the money you're going to owe. Same goes for a $55,000 home addition or a $1,000 furnace replacement. You're only going to have to pay back what you personally transfer into your checking account.

You Control the Funds
The other big benefit of a HELOC is that you control the funds and distribution instead of a lender. You won't have to wait for lender approval before moving on with home improvement projects, and you won't have contractors holding up work waiting for payment. You make all the calls yourself, keeping your home improvement project on the ball. Besides that, HELOCs offer you the benefit of using your line of credit for other unforeseen expenses as well. Other construction lines of credit are carefully managed by the lender and funds are only dispensed to contractors. With a HELOC, you can pay off medical bills and college tuition bills if need be. Beware of this course of action, however. With any line of credit, it's best to use it sparingly, and in this case for what you intended it: your new home improvement project. Still, it's nice to know you've got a line of credit at your disposal if something does come up where you need the funds.

For Home Improvement HELOC Can't be Beat
For all of these reasons, a HELOC is tough to beat. Whether you're looking to significantly add to the square footage of your home, want to remodel your kitchen, or just plan to redecorate the family room, there are few financing options that offer you the convenience, flexibility, and control of a home equity line of credit.