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HELOC Loans in Citrus County, Florida: Learn About the Benefits and How They Work

Location is one of the most important factors when purchasing a home. You and your family will spend a significant portion of your life in your home, so it is essential to make sure that you choose the correct location. For those considering living in Florida, Citrus County is a great option. The county offers various activities and attractions, including golfing, fishing, swimming, and boating.

For homeowners who've built up equity in their homes, a HELOC loan can be a great option. As a homeowner in Citrus County, you also can access HELOC loans. These loans can be a great way to finance home improvements or other expenses.

If you're considering taking out a HELOC loan, it's essential to know what it is, how it works, and the benefits it offers. This way, you can ensure that it is the right choice for you and your family.


What Is a HELOC?

A HELOC, or home equity line of credit, is a loan that allows you to borrow against the equity in your home. With a HELOC loan, you can borrow up to 90 percent of the appraised value of your home, minus any outstanding mortgage balances.

The HELOC loan works like a credit card because you only pay interest on the money you borrow. This can be a great way to finance home improvements or other expenses.

HELOC loans also have lower interest rates than credit cards, so that they can save you money in the long run. Additionally, the interest on HELOC loans is tax deductible, which can further reduce the cost of borrowing.


How Does a HELOC Work?

A HELOC loan has two phases - the draw period and the repayment period. During the draw period, which typically lasts five to ten years, you can borrow against the equity in your home as needed. There is no set schedule for repayments during the draw period; you only have to make interest payments on the money you borrow.

At the end of the draw period, the repayment period begins. During this time, you will need to repay the outstanding balance of your loan, plus any interest that has accrued. The repayment typically lasts 20 years, although it can be shorter or longer depending on your loan terms.


What About the 75-15 HELOC for Condos in Florida?

A significant perk of being a resident of Citrus County is that you have access to the 75-15 HELOC for condos in Florida. This loan grants you access to 75 percent of the total value of your condominium unit through a first mortgage. As much as 90 percent combined financing for a combination of a first and second mortgage on your primary residence.

Why do borrowers love this financing option? For starters, its limited review process skips the need for a condo budget, making it simpler and faster to get approved. The condo questionnaire you fill out is limited to the typical comprehensive multi-page document. Lenders don't put your association budget under scrutiny, and they aren't interested in verifying your fidelity bond coverage.

If you're worried about how many owner-occupied or investor units are in your building, don't be. Lenders don't consider this when they're reviewing your HELOC application. So long as you meet the other qualifications, you can rest assured that you'll be approved for the loan.


What Are the Benefits of Taking a HELOC?

With all the different types of loans, why should you take out a HELOC? HELOCs offer borrowers several advantages, including:


You Enjoy a Quick Application and Approval Process

The application and approval process can be lengthy and frustrating for many loans. The lender will want to scrutinize your financial history, employment record, and credit score. They'll also want to see a detailed account of your monthly expenses.

With HELOCs, the application and approval process is much simpler and quicker. Lenders are primarily interested in two things - the value of your home and your ability to repay the loan. As long as you have at least 20 percent equity in your home and have a credit score of 620 and above, you should be able to get approved for a HELOC with relative ease.


The Level of Flexibility is Impressive

HELOCs offer more flexibility than most loans. This is because they're revolving lines of credit, meaning you can borrow money, repay it, and then borrow again as needed. This is unlike most loans, which are not revolving and require you to borrow the entire amount at once.

The repayment terms are also flexible. As we pointed out before, HELOCs have draw and repayment phases. This arrangement allows you to take your time repaying the loan. You may not have to start repaying the loan for several years. And once you do enter the repayment phase, you can choose a repayment schedule that works for you.


You Only Pay Interest on the Money You Borrow

HELOCs are different. With most loans, you're required to pay interest on the entire loan amount, regardless of how much money you use. With these loans, you only pay interest on the money you borrow.

So, if you have a HELOC with a limit of $50,000 but only borrow $20,000, you'll only be responsible for paying interest on the $20,000. How does this benefit you? It keeps your costs down because you're only paying interest on your money.


HELOCs Offer Lower Interest Rates Than Most Loans

HELOCs typically have lower interest rates than most loans, including unsecured loans and credit cards. The average HELOC has an interest rate of 4.14 percent for a $50,000 loan as long as you have an LTV of 80 percent.

The average unsecured loan has an interest rate of 9.41 percent. That's a difference of more than five percentage points. For a loan of $50,000, that means you'll save thousands of dollars in interest charges over the life of the loan.


You Can Get a Substantial Amount of Money

HELOCs offer a lot of money. You can borrow 80 percent or more of your home equity with a HELOC. So, if your home is worth $200,000 and you have $100,000 in equity, you could qualify for a HELOC worth $80,000.

Of course, the amount of money you'll be approved for will depend on your credit score, income, employment history, and other factors. But even if you only qualify for a HELOC worth $30,000, that's still a substantial amount of money that can be used for a big purchase.


HELOCs Allow You to Spend Money as You Wish

Americans today have access to numerous loan types, many of which have conditions on how the money can be used. For example, student loans must be used for educational expenses. Personal loans can only be used for specific purposes, such as consolidating debt or making a large purchase.

HELOCs don't have such restrictions. You can use HELOC money for anything you want. Here are some of the common HELOC uses we see in Citrus County:

  • Home Renovations - The average American homeowner spends $15,000 on just one renovation project. That's a significant amount of money, which can be tough to come by. HELOCs allow you to finance home renovations without having to take out a separate loan - and without worrying about how you will pay for the work.

  • Debt Consolidation - If you have high-interest debt, HELOCs offer a way to consolidate that debt into one low-interest loan. This can save you hundreds or even thousands of dollars in interest charges over the life of the loan.

  • Large Purchases - HELOCs can also be used for large purchases, such as a new car or a boat. If you don't have the cash on hand to make these purchases, HELOCs offer a convenient and affordable financing solution.

  • Divorce Expenses - Divorce is expensive, and HELOCs can help you cover the costs. From attorney's fees to court costs, HELOCs can provide the money you need to make it through this difficult time.

HELOCs Offer Tax Deductions

If you itemize your deductions, you may be able to deduct the interest you pay on your HELOC. For the interest to be deductible, however, the HELOC must be used for home-related expenses, such as renovations or repairs.

The new tax laws that went into effect in 2018 added some restrictions to HELOC tax deductions. Specifically, the deduction is now only available if the HELOC is used for acquisition indebtedness. This means the HELOC must be used to buy, build, or substantially improve your home.


HELOC Loans Provide the Means to Boost Your Home's Value

If you're looking for a way to increase the value of your home, HELOCs can be a great option. You can use HELOC money to finance home improvements, boosting your home's value.

HELOCs can also be used to pay for significant repairs, such as a new roof or HVAC system. These repairs are not only necessary, but they also add value to your home.


Stack coins and house wood model


Steps to Getting a HELOC Loan

With all the benefits HELOCs offer, it's no wonder many Citrus County homeowners are interested in these loans. If you're thinking of taking out a HELOC, here are the steps you'll need to follow:


Know Your Credit Score

A HELOC loan may be secured, but lenders still want to see your credit report. This is because your credit score is a good indicator of your ability to repay the loan. You can get your credit score free from several sources, including Credit Karma and Annual Credit Report.

If there are errors in your credit report, such as late payments that you made on time, you'll want to dispute these errors before you apply for a HELOC. Otherwise, your credit score could be artificially low, leading to a higher interest rate.


Know How Much Home Equity You Have

HELOCs are based on home equity, so you'll need to know how much equity you have in your home before you can apply for a loan.

The easiest way is to contact your mortgage lender and ask for a reasonable faith estimate. This document will outline your current mortgage balance and the value of your home.


Shop Around for the Best HELOC Loan

Once you know how much home equity you have, you can start shopping around for HELOC loans. There are several factors to consider when comparing HELOC loans, including the interest rate, loan term, and fees.

You'll also want to consider whether the HELOC is adjustable-rate or fixed-rate. Adjustable-rate HELOCs have lower interest rates, but these rates can increase over time. Fixed-rate HELOCs have higher interest rates, but the rate will never change during the life of the loan.


Get Pre-Approved for a HELOC Loan

Once you've found the best HELOC loan for your needs, it's time to get pre-approved for the loan. This involves applying to the lender, which will include a credit check.

After you've been pre-approved for the HELOC, the lender will order an appraisal of your home. The appraiser will determine the value of your home, which will be used to calculate the maximum loan amount.


Attend Loan Closing

The loan closing is the final step in the HELOC loan process. You'll sign the loan documents during the closing, and the HELOC funds will be disbursed to you. You're now free to draw on the HELOC as you need it.


What About Refinancing?

Many borrowers confuse HELOC loans with refinancing, but they are two different things. HELOC loans allow you to borrow against the equity in your home, while refinancing allows you to take out a new loan to replace your existing mortgage.

Another key difference is that HELOC loans have two phases while refinancing only has one. With HELOC loans, you have a draw period during which you can borrow money as needed. You then enter the repayment phase, during which you must repay the outstanding balance of your loan.

With a refinancing, you take out a new loan to replace your existing mortgage. This new loan will have different terms from your original mortgage, such as a different repayment schedule.

There's also the fact that a HELOC is a revolving line of credit, while a mortgage is not. With a HELOC, you can borrow money, repay it, and then borrow again as needed. With a mortgage, you cannot do this. Once you've borrowed the money, you must repay it over the life of the loan.

Finally, HELOCs charge you interest only on the money you borrow, while mortgages charge interest on the entire loan amount. This can make HELOCs a more affordable option in the long run.


Finished the HELOC Process? Time for a Scoop of Ice Cream!

After all that work applying for a HELOC loan, you deserve a little something sweet. So celebrate your HELOC loan with Citrus County's best ice cream. Here are the best spots in Citrus County to get your ice cream fix:

  • The Ice Cream Station - Located in Inverness, The Ice Cream Station has various ice cream flavors, milkshakes, sundaes, and floats. They also have a large selection of toppings, so you can make your ice cream as unique as you want.

  • Cold Stone Creamery - If you're looking for a Cold Stone fix, Citrus County has two locations - one in Inverness and one in Crystal River. Cold Stone is known for their unique ice cream flavors and made-to-order ice cream cakes.

  • Dairy Queen - Head to Dairy Queen for soft-serve ice cream. They also have a wide selection of Blizzard flavors, shakes, sundaes, and other desserts. So whether you're in the mood for classic vanilla or something more unique, Dairy Queen has you covered.

Apply Today and Get the Funds You Need Quickly!

Citrus County is one of the best places in Florida to raise a family, thanks to its endless array of gorgeous natural scenery, family-friendly attractions, and top-of-the-line ice cream shops.

HELOC loans can help you make the most of your Citrus County home by giving you the funds to make improvements, pay for repairs, or cover unexpected expenses.

With the many benefits of HELOC loans, it's no wonder they're one of the most popular types of financing in Citrus County. Start the application process today and receive the funds in no time!

With over 50 years of mortgage industry experience, we are here to help you achieve the American dream of owning a home. We strive to provide the best education before, during, and after you buy a home. Our advice is based on experience with Phil Ganz and Team closing over One billion dollars and helping countless families.

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