Smart financial advice from local experts. Dollars & Sense Put Your Home to Work for you with a HELOC By Wes Stripling First National Bank & Trust Community Bank President A Home Equity Line of Credit (HELOC) is a loan secured by a borrower's real estate, such as a primary residence, second home, or cottage. The amount available is based on the equity in the property, which is the difference between the value of the property less any liens or mortgages against it. HELOCS provide the borrower with a predetermined credit limit that can be used any time and for any purpose up to the pre-approved limit. Features and benefits include: Ability to access funds by check, in person, by telephone transfer and online. Flexibility to repay principal at any time without penalties. Convenience of borrowing any amount at any time for any purpose, up to pre-approved credit limit. Competitive interest rates. Interest may be tax deductible Affordability Even though a HELOC is somewhat like a credit card, it is unlikely to costas much as one, depending how you use it By using your home as security for the HELOC, your lender runs a much lower risk of a loss if you get into financial trouble. Due to the security of the loan, the lender can generally charge much less in interest than current credit card rates and may also offer low introductory rates. HELOCS Vs. a Home Equity Loan Both HELOCS and Home Equity Loans (HEL)use your home as collat eral; however, a HELOC and a HEL are different. A Home Equity Line of Credit (HELOC) allows you to borrow as much (up to your limit) or as little as you wish, similar to a creditcard. Your payments can vary each month, depending on the amount you owe, and as you pay the balance down those funds become available again. With a Home Equity Loan (HEL), you receive a lump sum and then make monthly payments. Home Equity loans are installment loans, similar to a mortgage or auto loan, where you borrow a certain amount and then make a fixed payment for a set period of time to pay it back. Unlike with a HELOC, you know the exact terms of how long you'll be paying back your debt and you will have a fixed monthly payment. HELOC and Home Equity Loan rates are both influenced by your credit score and the amount of equity you have in your home. The interest paid on both types of loans may also be tax deductible. Be- cause the underlying collateral of either type is your home, failure to repay the loan or meet loan requirements may result in foreclosure. Lenders generally require that the borrower maintain a certain level of equity in the home as a condition of approval. Both HELOCS and Home Equity Loans are great options to help you finance home improvements, education, medical bills, or a new car- by being able to borrow what you need, when you need it. First National Bank & Trust Growing Roots in Our Community 3805 10th St. Menominee 906.863.7861 fnbimk.com FDIC Smart financial advice from local experts. Dollars & Sense Put Your Home to Work for you with a HELOC By Wes Stripling First National Bank & Trust Community Bank President A Home Equity Line of Credit (HELOC) is a loan secured by a borrower's real estate, such as a primary residence, second home, or cottage. The amount available is based on the equity in the property, which is the difference between the value of the property less any liens or mortgages against it. HELOCS provide the borrower with a predetermined credit limit that can be used any time and for any purpose up to the pre-approved limit. Features and benefits include: Ability to access funds by check, in person, by telephone transfer and online. Flexibility to repay principal at any time without penalties. Convenience of borrowing any amount at any time for any purpose, up to pre-approved credit limit. Competitive interest rates. Interest may be tax deductible Affordability Even though a HELOC is somewhat like a credit card, it is unlikely to costas much as one, depending how you use it By using your home as security for the HELOC, your lender runs a much lower risk of a loss if you get into financial trouble. Due to the security of the loan, the lender can generally charge much less in interest than current credit card rates and may also offer low introductory rates. HELOCS Vs. a Home Equity Loan Both HELOCS and Home Equity Loans (HEL)use your home as collat eral; however, a HELOC and a HEL are different. A Home Equity Line of Credit (HELOC) allows you to borrow as much (up to your limit) or as little as you wish, similar to a creditcard. Your payments can vary each month, depending on the amount you owe, and as you pay the balance down those funds become available again. With a Home Equity Loan (HEL), you receive a lump sum and then make monthly payments. Home Equity loans are installment loans, similar to a mortgage or auto loan, where you borrow a certain amount and then make a fixed payment for a set period of time to pay it back. Unlike with a HELOC, you know the exact terms of how long you'll be paying back your debt and you will have a fixed monthly payment. HELOC and Home Equity Loan rates are both influenced by your credit score and the amount of equity you have in your home. The interest paid on both types of loans may also be tax deductible. Be- cause the underlying collateral of either type is your home, failure to repay the loan or meet loan requirements may result in foreclosure. Lenders generally require that the borrower maintain a certain level of equity in the home as a condition of approval. Both HELOCS and Home Equity Loans are great options to help you finance home improvements, education, medical bills, or a new car- by being able to borrow what you need, when you need it. First National Bank & Trust Growing Roots in Our Community 3805 10th St. Menominee 906.863.7861 fnbimk.com FDIC