As the COVID-19 pandemic takes a toll on our world’s health, it is also greatly impacting the economy and our usual incomes. If you are an employee who is experiencing a lack of job security amid social distancing, revisiting your current budget may be essential.
Due to pay cuts or a reduction in hours at your job, it’s possible that those home remodeling projects you have been planning for are getting put on the back burner. You might even be struggling to come up with ways to pay the monthly bills. But did you know that the equity in your home can be used as a valuable source of financial assistance? If you have found yourself searching for a smart way to take care of expenses or fund a project during the COVID-19 pandemic, then a home equity loan or home equity line of credit could be the right solution.
What Is a Home Equity Loan Used For?
Home equity loans are a type of second mortgage that you can place on your home if you have built up enough equity. With the equity that you have earned on your home already, you can borrow at a competitive rate. Home equity loans are commonly used for remodeling or improvement projects, but are also a smart way to consolidate debt, pay tuition, or pay medical expenses. A home equity loan typically allows you to borrow 80-85% of your home’s value, subtracting what you owe on your mortgage. With Discovery FCU’s home equity loans, you can expect zero application fees and up to twenty years to pay back what you borrow. Plus, you can use this loan on multiple projects!
The Difference Between a Home Equity Loan and a Home Equity Line of Credit
Discovery FCU offers both fixed-rate home equity loans and home equity lines of credit (HELOCs) to its members. Both types of loans can be used to finance the same projects, but they are different in how you receive your cash. With home equity loans, you are given a lump sum upfront that will be paid off over time. HELOCs, on the other hand, you are presented with a maximum amount that can be borrowed from whenever you choose to do so. This line of credit can be revisited, permitting you to borrow multiple times for various projects. With the ability to only borrow what you need, a HELOC presents a flexible option for loan seekers.
At Discovery FCU, we’re here to ensure that our members remain as financially secure as possible during this difficult time. With our fixed-rate home equity loans and HELOCs, you can easily choose the best option to fund your future projects or simply supplement your lost income due to the COVID-19 pandemic. Learn more about how you can apply for a home equity loan with zero application fees today.