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Home Equity Line of Credit in Kentucky
While some residents in Kentucky rent their homes, the U.S. Census Bureau states that approximately 67 percent of the state’s residents own their own homes. Tax deductions are one of the top financial beneficial associated with owning a home in Kentucky, but the ability to build equity over the years may be a superior benefit that accounts for significant personal wealth. Equity in a home can be established in several ways. For example, your initial down payment at the time of purchase established immediate equity in the home. This equity grew over the years as you made regular payments that decreased your home debt, and it also grew even more as the property value appreciated. Many homeowners are pleased to discover that they are sitting on a sizable nest egg, and some want access to that nest egg for various purposes. Applying for a home equity line of credit in Kentucky is an excellent solution to consider.
Understanding What a Home Equity Line of Credit Is
A home equity loan is a common option that homeowners in Kentucky use to access home equity. This is usually a fixed term loan that gives you a lump sum of cash at closing, and the loan payments are due immediately. A home equity line of credit is similar to this in some ways. For example, it is usually a fixed term loan that uses home equity as collateral. However, with a HELOC, you typically have a defined period of time when you can take withdrawals against the credit line. Some lenders will provide you with checks or a debit card that you can use to access your credit line as desired for your convenience. When the initial period of time has passed, you will no longer be able to make additional charges to the credit line, and the monthly debt payments will be due. A HELOC is often used for debt consolidation, home renovations, new investments and various other purposes.
Estimating the Equity Available to You Through a HELOC
As a Kentucky homeowner, you understandably want to know how much money you will have access to when you apply for a HELOC. With a purchase loan in Kentucky, you may have been able to borrow as much as 95 percent or more of the home’s value. With a HELOC, however, you can typically only have debt up to 80 percent of the home’s value. This includes the first lien debt. Therefore, estimate the current property value, and apply 80 percent to this figure. Then, subtract the current debt balance on the home to calculate available equity. This will tell you how much money you have access to through a HELOC.
Exploring Terms for Kentucky Home Equity Lines of Credit
It is wise to determine if the payment on a HELOC is affordable for your budget before you apply. A great step to take to review affordability is to research estimated home equity line of credit terms. Some of the top Kentucky HELOC lenders that you may turn to for a quote include Third Federal, Republic Bank, US Bank, Forcht Bank, First Capital Bank of Kentucky and several others.
Having access to extra capital can help you to achieve incredible plans. You may be able to re-position your debt to improve your monthly budget, fix up your home so that it meets your needs and style preferences and more. If you have equity in your home and big plans for the use of your equity, now may be an ideal time to research HELOC programs available through some of the top lenders in Kentucky.