It's easy to see why people love Brevard. The county offers many beaches, great surfing, fishing, and boating. There's also the Space Coast, with all its associated attractions. Besides, Brevard's towns and cities have many amenities and housing options, from beachside condos to rural acreage.
Whether a long-time Brevard resident or considering moving to the area, HELOC loans can be an excellent financing option for your home. This article will explain what HELOCs are and how they work. We'll also discuss some of the benefits of HELOC loans in Brevard County, Florida.
What Is a HELOC?
A HELOC is a Home Equity Line of Credit. It's a loan that uses the equity in your home as collateral. HELOCs are flexible, allowing you to borrow as much or as little as you need, up to the limit set by the lender. And like a credit card, you only pay interest on the portion of the loan that you use.
HELOCs typically have a draw period, during which you can borrow funds. After the draw period expires, you enter the repayment period and begin paying back the loan principal plus interest. Typically, the draw period lasts five years to ten years.
HELOCs are different from home equity loans because you're given a revolving line of credit that you can draw from as needed, up to a specific limit, rather than receiving a lump sum of cash all at once. The HELOC's credit limit is determined by the amount of equity in your home and your creditworthiness. And like other types of loans, you'll have to pay interest on the money you borrow with a HELOC.
Understanding the 75-15 HELOC for Condos in Florida
If you're a Florida homeowner, you may be familiar with the 75-15 HELOC. This type of HELOC is available for primary residences and investment properties owner-occupied. It allows you to borrow up to 75 percent financing on a 1st mortgage. Borrowers may get as much as 90 percent combined financing on their first and second mortgages for their primary residence.
One of the great things about the 75-15 HELOC is that it's a limited review loan. It doesn't require fidelity bond coverage or an analysis of the association budget. For this reason, it's a good option for Florida condo owners who want to avoid approving their condo association's budget.
But that's not all. With the 75-15 HELOC, the number of owner-occupied or investor units doesn't matter. In other words, you can still get this type of HELOC even if your condo complex has a high percentage of investor-owned units. This is good news for Florida condo owners who want to take advantage of HELOCs but don't want to worry about their complex's mix of owner-occupied and investment units.
Benefits of HELOC Loans in Brevard County, Florida
With all the different types of financing options available, you may be wondering why HELOC loans are a good choice for Brevard County homeowners. HELOCs offer many benefits, including:
HELOC Loans Have Flexible Underwriting Standards
Every loan has specific underwriting standards that borrowers must meet to be approved. HELOCs tend to have more flexible underwriting standards than other types of loans.
That's because you're using the equity in your home as collateral. As long as you have enough equity, you're more likely to be approved for a HELOC than other loans.
HELOCs Offer Lower Interest Rates
Another benefit of HELOCs is that they often have lower interest rates than other types of loans. That's because the equity in your home secures HELOCs. And since your home equity is typically worth more than the amount you borrow, lenders see HELOCs as low-risk loans. This translates into lower interest rates for borrowers.
Besides, you only get to pay interest on the amount you borrow with HELOCs. Unlike other types of loans, you have to pay interest even if you don't use all the loan funds.
HELOCs Are Tax-Deductible
In most cases, the interest on HELOCs is tax-deductible. That's because HELOCs are considered home equity loans. And as long as you use the HELOC funds for major expenses like home renovations or repairs, you can deduct the interest on your HELOC from your taxes.
Initially, the loans were tax deductible, up to $100,000. However, the new tax law that went into effect in 2018 increased the HELOC deduction limit to a maximum of $750,000. So if you have a HELOC with a balance of $750,000 or less, you can deduct the interest on your HELOC from your taxes.
HELOCs Offer Flexible Repayment Terms
HELOCs also offer flexible repayment terms. Typically, HELOCs have a draw period, during which you can borrow funds. After the draw period expires, you enter the repayment period and begin paying back the loan principal plus interest. The length of the draw period varies from lender to lender, but it's typically five years to ten years.
This means that you don't have to start repaying the loan right away. You can wait until the draw period expires and then begin paying back the loan over the remaining term, typically 20 years. This gives you plenty of time to make any necessary repairs or renovations to your home.
HELOCs Offer a Revolving Line of Credit
HELOCs offer a revolving line of credit, which means you can borrow as much or as little as you need, up to your credit limit. This flexibility is one of the main reasons why HELOCs are so popular. And it's also one of the main reasons why HELOCs are often used for home improvements and repairs.
With a HELOC, you only have to pay interest on the portion of the loan that you use. So if you only need to borrow a few thousand dollars for repairs, you won't have to pay interest on the entire loan amount.
HELOCs Can Be Used for a Variety of Purposes
Some loans can limit borrowers to a specific purpose. For instance, if you take a student loan, the loan funds can only be used for education-related expenses. An auto loan can only be used to finance a vehicle purchase.
But HELOCs can be used for a variety of purposes, including:
Repairs and Renovations
Each year, the average US homeowner spends $3,018 on home repairs and general upkeep. Upgrades, such as a kitchen remodel or a new backyard pool, can cost much more. If you're short on cash, a HELOC can help you finance these necessary repairs and renovations.
HELOCs can also be used to pay for education-related expenses, such as tuition and textbooks. And since the interest on HELOCs is tax-deductible, you can save even more money by using a HELOC to pay for your education.
While emergencies are a fact of life, many people don't take the necessary steps to prepare for them. Fifty-six percent of Americans say they have no savings to pay for an unexpected $1000 expense. A HELOC can be a great way to cover these unexpected expenses for homeowners with equity in their homes.
If you have high-interest debt, such as credit card debt, a HELOC can help you save money on interest. HELOCs can also be used to consolidate debt. And since HELOCs offer flexible repayment terms, you can tailor your repayment schedule to fit your budget.
The average divorce in the US costs $15,000. Not many people have that kind of money lying around. But if you're an equity-rich homeowner, things are a bit different. A HELOC can help you pay for divorce-related expenses, such as attorney's fees and the cost of selling your home.
A HELOC Loan Can Help You Increase Your Home's Value
Part of being a responsible homeowner is taking steps to increase your home's value. HELOCs can be used for various home improvements, such as updating your kitchen or bathroom, adding a deck or patio, or finishing your basement.
These improvements can add thousands of dollars to your home's value and make it more appealing to potential buyers.
You Can Borrow a Significant Amount of Money
HELOCs offer a significantly higher loan amount than most other types of loans. With most lenders, you may be able to access funds totaling 80 percent or 90 percent combined loan-to-value ratio (CLTV).
This means that your current loan amount and the HELOC funds can total up to 90 percent of your home's appraised value. So if your home is valued at $200,000, you may be able to borrow up to $180,000 through a HELOC.
The Approval Process Is Fast and Easy
HELOCs have a relatively fast and easy approval process compared to other loans. In most cases, you can complete the entire process online in just a few minutes.
And once you're approved, you can access your HELOC funds within a day or so. This is perfect for homeowners who need to make repairs or take care of other unexpected expenses.
Applying for a HELOC in Brevard County, Florida
If you're a Brevard County homeowner interested in applying for a HELOC, there are a few steps you need to follow. Here's what the process looks like.
Step 1 - Determine How Much Equity You Have
If you're interested in applying for a HELOC, the first step is to check your home equity. To do this, you'll need to know your home's appraised value and your current mortgage balance. Once you have this information, you can calculate your home equity by subtracting your mortgage balance from your home's appraised value.
For example, let's say your home is valued at $200,000, and you have a mortgage balance of $100,000. This means you have $100,000 in home equity. If you're looking to finance a $15,000 home improvement project, you would need to take out a HELOC for $15,000.
Step 2 - Shop Around for the Best HELOC Rates and Terms
Once you know how much home equity you have, it's time to start shopping around for HELOCs. This step is essential because HELOC rates and terms can vary significantly from lender to lender. So it's crucial to compare rates and terms from multiple lenders before choosing a HELOC.
When shopping around for HELOCs, compare the interest rate, repayment term, and any fees associated with the loan. Once you've found a HELOC with favorable rates and terms, you can apply for the loan.
Step 3 - Complete the Application Process
The next step is to complete the HELOC application process. This usually involves completing an online application and providing basic information about your finances. In most cases, you'll need to provide your income, employment history, and asset information.
Once you've submitted your application, the lender will review your financial information and decide whether to approve your HELOC. If you're approved, the lender will provide you with a HELOC agreement outlining the loan's terms.
Step 4 - Review and Sign the HELOC Agreement
Once approved for a HELOC, it's essential to review the HELOC agreement carefully. This document will outline all of the terms of your loan, including the interest rate, repayment term, and any fees associated with the loan. Be sure to read the agreement carefully and ask any questions before signing.
After you've reviewed and understood the terms of your HELOC agreement, you can sign the document and officially take out the loan. Once you've signed the agreement, the lender will provide you with the funds you need to finance your home improvement project.
Step 5 - Draw on the HELOC as Needed
Once you've signed your HELOC agreement, you can draw on the loan as needed. You can access the funds up to your credit limit whenever you need them.
And because a HELOC functions like a line of credit, you only have to pay interest on the portion of the loan that you use.
5 Places You Can Enjoy the Best Ice Cream in Brevard County, Florida
One of the perks of living in Brevard County is always eating something delicious. And when the summer heat hits, there's nothing better than a cold and creamy scoop of ice cream.
Here are five spots you need to check out if you're looking for the best ice cream in Brevard County, Florida:
The Ice Cream Club
Nestled in Satellite Beach, The Ice Cream Club is known for its creative flavors and friendly service. Some of their most popular flavors include Key Lime Pie, Peanut Butter Cup, and Cookies and Cream. And if you're looking for something unique, try the Bubble Gum ice cream.
If you're in the mood for a classic ice cream treat, look no further than Dairy Queen. This Titusville spot serves up all of your favorite DQ classics, like Blizzards, dipped cones, and banana splits.
Fat Cats Ice Cream
Fat Cats Ice Cream is the place for you if you want to indulge in a rich and decadent ice cream experience. This spot is located in Melbourne and specializes in gourmet ice cream flavors.
Some of their most popular flavors include Salted Caramel, Cookies and Cream Cheesecake, and Peanut Butter cups.
The Filling Station
With its retro vibe and delicious ice cream, The Filling Station is a must-visit spot in Cocoa Beach. This spot is known for its old-fashioned ice cream sodas and milkshakes. And if you're looking for something more unique, try the Key Lime Pie or Orange Creamsicle float.
Little Ice Cream Shoppe
If you're looking for a charming ice cream shop with a great selection of flavors, Little Ice Cream Shoppe is the place for you.
This Merritt Island spot has served delicious ice cream for over 40 years. And with flavors like Vanilla Bean, Chocolate Chip Cookie Dough, and Butter Pecan, it's easy to see why this place is so popular.
Apply Today and Enjoy the Benefits of HELOC Loans!
If you're a Brevard County homeowner looking for financing, HELOC loans are an option worth considering. HELOCs offer many benefits, including flexible underwriting standards, lower interest rates, tax deductibility, and the ability to draw on the loan as needed.
The application is simple, so you should be through in time to enjoy a scoop of one of the ice cream in one of the local spots.
Visit your local Brevard County HELOC lender today and start the application process!