There are many instances over the course of time when most people will need access to extra funds for various purposes. In some cases, pulling money out of a savings account or making a charge to a credit card will suffice. In other cases, you may need access to a considerably larger amount of money, and you may be eying your home equity as a source of needed funds. Through a home equity line of credit, Vermont homeowners can easily access their home equity, and you may have access to tens of thousands of dollars of cash to use as you desire. However, before you draw from your home’s equity or borrow a substantial amount of money, it is important to learn more about HELOCs to determine if they are a great option for your current financial needs.

What You Need to Know About Home Equity Lines of Credit

A home equity line of credit in Vermont will take the second position in home debt. This means that you will not need to pay off your first lien home mortgage when you apply. However, if you have a current second lien in place, this debt will need to be paid off before or during the HELOC process. A home equity line of credit uses the equity in your home as collateral, and this means that the interest on the line of credit is typically deductible on your income taxes. Furthermore, the loan term may be rather lengthy, and this can create very affordable payments despite borrowing a substantial amount of money.

What It Takes to Qualify for a HELOC

You may wonder if you can qualify for a HELOC in Vermont. Each lender has unique requirements, including credit score and debt-to-income ratios, that you must meet. In addition, you must have substantial equity in the home to qualify. Generally, you will be able to borrow up to 70 to 75 percent of the total home value, but this includes first lien debt as well. To determine the amount you may access through a HELOC, take the current property value. Multiple this figure by 70 to 75 percent. Then, subtract your current first lien balance. This is the amount you may be able to borrow from a HELOC. Your property value will be carefully reviewed during the loan application process, and an appraisal may be ordered if a recent report is not already available.

Who to Turn to For a Vermont Home Equity Line of Credit

Many homeowners in Vermont are understandably conscientious about taking on more debt than they can afford, and many are interested in learning about potential loan terms and estimated payments before they apply. If you are thinking about getting quotes for Vermont lines of credit on home equity, you can easily request a quote from some of the top lenders in the state. These include Northfield Savings Bank, Key Bank, Merchants Bank, TD Bank and several others. While you can review loan terms and rates online, it is best to get a firm quote by completing a prequalification with the lender. This will provide you with more realistic figures.

A home equity loan can be used for a wide range of purposes. Many will use the money to further enhance their home through a renovation, and this can create additional equity in the home in many cases. Others may use the funds for debt consolidation to reduce the overall monthly debt payments, to take a vacation or to enjoy other benefits. If you are a Vermont homeowner, take time to explore a HELOC as a possible financing solution today.