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Home Equity Line of Credit in Illinois
Home equity is a wonderful benefit associated with home ownership. Equity essentially is the difference between the value of the home and the debt you owe on the home through mortgages. If you own a home in Illinois, your equity was likely initially established through your down payment when you purchased the home. Equity typically grows over the years because of mortgage payments that reduce the principal loan balance and because of property value appreciation. Many Illinois residents who have owned their home for more than a few years have had the incredible opportunity to amass tens of thousands of dollars or more in equity. You may now be wondering if you can pull any of that equity out of your home for plans you have, and the good news is that a home equity line of credit gives you that opportunity.
What Does a Home Equity Line of Credit Do?
A home equity line of credit is very similar to a home equity loan. Both will typically take the second position behind the first mortgage. This means that your first lien mortgage will not be altered, but you may need to pay off your second lien if you currently have one in place. Both will pull equity out of the home. However, a home equity loan gives you a lump sum amount of cash when you close on the loan, and payments are due immediately. With a home equity line of credit or HELOC, you typically are permitted several months to make draws on the money before payments are required. During this initial period, you may use a debit card or checks linked to the HELOC to conveniently make payments.
How Much Money Can You Get?
You may be wondering how much equity you have access to through a home equity line of credit. When you purchase a new home, you may be able to obtain a loan that is 95 percent of the home’s value or more. However, with a home equity situation, the lender typically wants you to retain more equity in the home. It is common for a lender to lend up to 75 to 80 percent of the current home’s value. However, from this figure, you will need to subtract the current first lien debt. Even when this is all taken into account, many people have access to a sizable amount of money that they can use for other investments, for debt consolidation, for home improvement and for various other purposes.
Finding a Home Equity Line of Credit in Illinois
One of the primary factors that may be holding you back from applying for a home equity loan in Illinois may be related to finding a great lender to work with. The good news is that HELOCs are very popular in this state, and most credit unions and other financial institutions offer them. If you are looking for the right lender to apply for a HELOC with, you may consider turning to some of the state’s top lenders as you shop around for superior rates. These include Third Federal, First Midwest Bank, Harris Bank, US Bank, First Bank, Bank of America and others.
Applying for an Illinois home equity loan provides you with the incredible ability to access your home’s equity. This is cash that you can typically use without limitations, so you may easily be able to accomplish the goals you have once your line of credit is established. You can begin examining the amount of equity available in your home and comparing loan terms as a first step in the application process.