Homeowners: Where Will You Find the Money for All Those Spring Projects?

Local banks and credit unions have some great products to help make that home of yours a special place. I am going to breakdown two affordable primary loan types. Both can be tax deductible, but check with your tax accountant to see how it works for you.

Home equity line

This option has excellent purposes. It's flexible for use in home improvements, debt consolidations (as long as you are diligent and do not run up the credit accounts you just paid off), large purchases, vacations, future needs, children's college expenses, and especially for emergency needs.

Your limit is based on the equity in your home.

It's a variable rate, but it is tied to prime. Check with your bank.

The line comes with a borrowing period usually up to 10 years with an additional 15 to 20 years for payback of any remaining balance at that time.

Borrow as you need, and pay it back quickly or on a minimum payment amount. 

Beware of early an closure fee. You can have a zero balance, just dont close the account. Your bank will have specifics on this.

Traditional home equity loan

Good for one-time purchases like fixed home improvement projects or large ticket items. By fixed home improvement projects, I mean projects with a set budget that will not change.

The rate and term are fixed, and all funds are borrowed up front. You begin paying interest from the start. However, beware of a pre-payment penalty if you pay it off early. Each bank will have specifics on this.