Ways to Use Your Equity for Home Improvement

Using your home’s equity for home improvement as a way to reinvest into your home is a great idea. You’ll be reinvesting the value earned over the course of homeownership back into the home to grow the value even more. Two ways to use your equity include a HELOC and a Home Equity Loan.  

Your home’s equity is the difference between the appraised value of your home and the balance owed on your mortgage. This asset is a valuable tool that you can use as collateral to secure good rates on loans to finance home improvements. Bellco Federal Credit Union offers a friendly ear and expert advice as you navigate the various options.                                                                                  

Bellco FCU is a member-owned, not-for-profit federal credit union. Since 1938, we’ve offered checking and savings accounts, home equity financing, and various other financial products and services to individuals and small businesses in Berks County, PA. 

Our goals are always focused on enhancing the lives and financial needs of our members/owners. We want to match the member with the right financial product or service. If you’re looking for the best way to use your equity to finance home improvements and further grow your home’s value, we’re happy to discuss the differences between a HELOC and a Home Equity loan. 

Becoming a member of Bellco Federal credit union will enable you to access all of the advice and financial services. Those who have a residence, place of worship, job, or school in Berks County, or have an immediate family member who is a member, can make a small deposit into a member savings account and become a member quickly. 

HELOC (Home Equity Line of Credit)

A HELOC, or Home Equity Line of Credit, allows you to borrow up to 80 or 90% of the equity built up in your home. A HELOC is cyclical, like a credit card, allowing you to continue borrowing up to the limit as long as you’ve paid down what you have spent. The “draw period” of the HELOC is usually five to ten years, giving you plenty of time to pay for home improvements. 

When this initial period ends, you’ll then need to repay the balance of the HELOC. You’ll owe only what you’ve spent, and you’ll usually have a set amount of time to repay.

Home Equity Loan

You could also take out a home equity loan to pay for home improvements. When you face a large expense due at one time, this method could be your best option. You’ll be borrowing one large sum and repaying it with a fixed rate of interest over a fixed term. This financial product functions largely as a second mortgage.

It’s important to note that both of these options are secured forms of borrowing, and the collateral, your home, is at risk if you fail to repay as promised.

For an excellent place to secure a HELOC or home equity loan, come to Bellco FCU; we’ll treat you well throughout the process. Stop in today for in-person service, or jump online or on the phone for assistance from our customer service team. We make it easy to secure various ways to use your equity for home improvement.