A HELOC, or home equity line of credit, provides Utah homeowners with a convenient way to access equity in their homes. Many of the state’s residents are proud homeowners. They often have great equity accumulated in their homes. Equity is established through the initial down payment when you purchase the home, and it continues to accumulate through your regular monthly mortgage payments as well as through property appreciation. While some of the state’s homeowners work hard to accrue considerable equity and to eventually pay off their home entirely, others may strategically borrow funds for various beneficial purposes at various times over the years. By learning more about home equity lines of credit in Utah, you will be able to better determine how to proceed.
What You Need to Know About Utah HELOCs
A HELOC is a line of credit that is secured by your home’s equity. This is a loan that takes the second position behind your first lien mortgage. However, you will typically not be permitted to have a second lien in place while you have a HELOC. If you currently have a second lien, it will need to be paid off before or during the application process. A straight home equity loan gives you a lump sum of cash when the loan closes. A HELOC, on the other hand, gives you access to a line of credit. You can typically tap into that line of credit through a debit card or checks for a limited period of time. After the initial time has elapsed, you will need to begin making payments on the amount you borrowed. Many people who need access to home equity have multiple uses of funds in mind, so a HELOC may make sense.
Determining How Much Money You Can Borrow
To determine if a HELOC is right for your current plans and needs, you must estimate the amount of credit you may have access to. Typically, the combination of the first lien and the line of credit cannot exceed approximately 70 to 75 percent of the home’s value. This means that you must determine your current property value. Take 70 to 75 percent of the value, and subtract the current principal balance of your first lien mortgage. The remaining amount is the approximate amount you may borrow through a line of credit if you qualify.
Who to Request a HELOC Quote From
While it is important to determine if a line of credit would provide you with access to enough funds to complete the project you have in mind, it is also important to determine if the HELOC payments will be affordable for your budget. Getting quotes from reputable lenders in Utah is a smart idea. While many banks and credit unions offer HELOCs in this state, some lenders make the majority of the loans. You can request a HELOC quote by contacting some of the top Utah HELOC lenders as a first step. These lenders include Key Bank, Bank of the West, Bank of America, Mountain Bank and several others. You may request a firm loan quote to obtain more substantial information from each lender.
Many homeowners are able to access tens of thousands of dollars or more through a home equity line of credit in Utah. With this substantial amount of money, you may be able to renovate your home, consolidate high interest credit card debt to improve your financial situation, make significant financial investments and more. After learning more about how much money you may qualify for through a HELOC, you can begin to imagine the possible beneficial uses of the funds. Take time to request quotes for a Utah HELOC today.