Oklahoma is one of the most affordable states to live in for homeowners on a budget. There are almost four million people living in Oklahoma who are proud to call the state their home. The average home price in Oklahoma is $135,000 and appreciation values have gone up significantly over the past decade. This increase is most evident in the Woodward and Vici areas. Home equity loans and HELOCs are incredibly common in Oklahoma because over 70 percent of working adults own their own properties.
What to Know About HELOCs
A home equity line of credit, more commonly referred to as a HELOC, is a line of credit you will take out against the equity in your home. The bank uses your home as collateral if your account should become delinquent. You will have a specific draw limit on your HELOC account and a time period in which to use the funds. Once you have exhausted the funds or the time period has passed, you can choose to reapply for another HELOC. Unlike a loan that gives you a lump sum of money, the HELOC is used similarly to a credit card, but without the hefty interest fees attached.
Advantages of Opening a Home Equity Line of Credit
Home equity line of credit accounts are popular because of their low interest rates and large draw limit. Typical credit cards have a limit of about $15,000, which makes it difficult for people to obtain the money they need for large emergency purchases. Average credit cards also have high interest rates that can be upwards of 15 to 20 percent. Your HELOC account will have a lower rate that makes paying back your credit more affordable. You do not need to have a good credit score to be approved for a HELOC account. Most banks put more emphasis on your home’s value and equity than they do on your FICO score.
Finding a Great Rate in Oklahoma
To get a good rate, you’ll need to do some comparison shopping of different banks throughout the state of Oklahoma. When you compare rates, remember that the bank is going to need to obtain additional home-related information before they can give you a solid account interest. Just because a bank says they offer a 4.5 percent rate on HELOCs does not necessarily mean that everyone who applies can get this rate. Most HELOC accounts have variable rates, which means that the interest will shift according to the market in the area.
The Fine Print
Taking out a home equity line of credit is a great option for homeowners who need a larger credit line they can draw on at virtually any time. Unfortunately, it can also be quite risky to put your home on the line for a new credit card. Your home is used as collateral, so the bank has all right to take possession of the property if your account doesn’t get paid on time. When taking out this type of credit card, you need to be especially particular with how it’s used and only use it for emergency situations that you know you’ll be able to pay back. This prevents you and your family from being put into a precarious situation simply because you were delinquent on payments.
Here is a list of some of the best banks found throughout Oklahoma offering HELOCs:
- Bank of Oklahoma
- Arvest Bank
- Bank of the West
- Midfirst Bank