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Home Equity Line of Credit in Kansas
Kansas is home to almost three million people. While it’s not the most populated state in the country, it is one of the most affordable due to its low cost of living. The average home sells for roughly $140,000. Appreciation values have gone up tremendously over the past few years, which has allowed homeowners to build more equity in their homes. A whopping 70 percent of all adults living within the state own their own property, making it one of the most homeowner-friendly states in America.
What is a HELOC?
A HELOC, also known as a home equity line of credit, is similar to a credit card because you’ll be able to draw on a specified amount whenever you choose to use your card or checks. Unlike typical credit cards that are based on a person’s FICO score, a HELOC is solely tied into the equity of your home. Banks will approve your home equity line of credit if you’ve been a homeowner for more than 10 years and have vested at least 40 percent into the assessed value of your property.
Benefits of Opening a Home Equity Line of Credit
With traditional credit cards, you’re stuck with a hefty interest rate and your credit score needs to be good or excellent in order to obtain one. With a HELOC, you don’t need to have good credit at all to be approved. The interest rates attached to HELOC accounts are low and affordable. You also have a larger draw limit on your home equity line of credit when compared to other cards you can take out. In fact, most banks allow homeowners to borrow up to 85 percent of the value of their home, which is roughly 10 times the amount you’d be eligible to receive with a regular high-interest credit card.
During the application process, the bank will ask you questions similar to what you’d find with a credit card application form. What makes HELOC applications different is that you’ll need documentation and proof that you are the owner of your home and that you have stable equity built into the property. The application process could take about a month or two before you hear anything back from the bank. If your home has not received a county assessment in the past five years, you’ll need to have an assessor come out and do an evaluation for you.
Finding the Right Bank
All banks charge different interest rates and have varying guidelines attached to their available HELOC accounts. In the state of Kansas, most home equity line of credit accounts have a 5.5 percent interest rate attached. If you can find a bank that offers a lower rate, you’ll obviously want to apply for that credit line as opposed to one that has a higher rate. Many HELOCs have variable rates, which means that your interest rate will change according to the current housing market in Kansas. This can be a good and a bad thing because you will never have a stable bill, but you may routinely get a very low interest fee on your statement.
Below is a list of some of the most popular banks in Kansas offering HELOCs:
Before signing along the dotted line and putting your home at risk, you need to know the pros and cons of taking out a home equity line of credit in Kansas. Ask the lender everything you need to understand about the credit line to avoid losing your home to a bad financial decision.