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Home Equity Line of Credit

Once upon a time, HELOCs were promoted as a great way to shop for life’s luxuries. New cars, vacations, furniture—you name it, and a HELOC could likely help you buy it.

Then home values started falling. New HELOCs became scarce, and many homeowners who had already accessed their homes’ equity found their situations had changed. In some cases, credit lines were cut back or closed with little if any warning. Where borrowers found themselves with total loan balances higher than the values of their homes, HELOCs became an impediment to refinancing.

Yet HELOCs are not inherently bad!

When used wisely, a line of credit can be a valuable financial tool, potentially allowing tax-advantaged access to the funds invested in your home.

  • HELOCs may cut the cost of purchasing needed things you might otherwise finance with consumer debt.
  • HELOCs might also be useful when established as a reserve and used only if an emergency or significant opportunity occurs. In this manner, a HELOC can provide for comfort and safety without any ongoing cost. That’s a deal that’s pretty tough to beat.

Reach out if you would like to learn more about how a HELOC may work for you.

*Always consult with your tax professional for advice specific to your situation.